fin 


Printing  Concerns 

BY    WflhX3ER  JOBSOnJE? 


Digitized  by  the  Internet  Archive 

in  2007  with  funding  from 

Microsoft  Corporation 


http://www.archive.org/details/accountingsystemOOjobsrich 


n  Accounting 
System    to  r 
Printing  Concerns 


By      Walter      Jolso 


•  •    • 


•    ••• 

•  *  ■ 


Louisville,  Kentucky 
Press    of    Jokson   Printin(f    Company 


«vt31 


COPYRIGHT,  191 2,  BY  WAWBR  P.  JOBSON,  JR. 


An  Accounting  System  for 
Printing  Concerns 


By  AValter    JoI>»on 


INTRODUCTION:  The  bet- 
ter  business  methods  now  com- 
ing into  general  use  among  the 
printing  trade  have  created  an 
interest  in  accounting  as  well  as  costs. 
One  is  as  important  as  the  other.  The 
cost  system  shows  the  price  at  which 
printing  may  be  sold  at  a  profit,  while 
the  accounting  system  serves  as  a  check 
on  the  cost  system  and  furnishes  infor- 
mation without  which  an  accurate  cost 
system  is  impossible. 


248568 


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An    Accounting    System 


The   accounting   system  should  show: 

Amounts  due  from  customers. 

Amounts  due  creditors. 

Sales  of  Paper  Stock,  Ink  and  other  ma- 
terials, and  amounts  paid  for  them. 

Sales  of  Printing  separate  from  above  items. 

All  the  expenses  of  the  business,  such  as 
Pay  Roll,  Office  Expense,  General  Expense  and 
Department  Expense,  subdivided  so  that  the 
amount  paid  for  any  item  can  be  easily  located. 

Profits  and  Losses,  both  as  shown  by  the 
sales  each  month,  and  as  an  actual  net  result 
at  the  time  of  the  annual  Balance  Sheet. 

The  system  described  here  has  been  in  prac- 
tical operation  for  some  time  and  will  furnish 
all  the  above  facts,  while  every  method  of  mak- 
ing entries  is  used  that  will  save  clerical  labor. 

The  subdivisions  of  the  expense  items  are 
arranged  especially  for  those  concerns  using  a 
Cost  System  based  on  the  chargeable  hour 
method,  in  order  to  give  the  information 
needed  for  filHng  out  the  "Monthly  Summary 
of  Cost;'*  but  the  information  derived  from 
these  accounts  will  be  valuable  whether  the 
cost  system  is  in  use  or  not. 

No  attempt  is  made  to  explain  the  elemen- 
tary principles  of  the  double  entry  system  of 
bookkeeping,  as  they  are  the  same  in  all  lines 
of  business,  but  we  will  take  up  more  particu- 
larly the  points  in  which  this  business  differs 


For    Printing    Concerns 


from  others,  and  the  forms  introduced  for  the 
purpose  of  saving  labor.  According  to  usual 
custom,  the  left  hand  column,  hereafter,  will 
be  referred  to  as  the  debit  column,  and  the 
right  hand  column  as  the  credit  column. 

Loose  Leaf  Methods:  Several  years'  ex- 
perience with  both  ways  has  convinced  me 
that,  with  a  few  exceptions,  the  loose  leaf 
method  is  by  far  the  best.  By  this  method, 
only  live  sheets  or  accounts  need  be  kept  in 
the  current  binders,  all  dead  material  being 
filed  away  in  the  transfer  binder,  while  any  old 
sheets  which  become  "live"  again  can  readily 
be  put  back  in  the  current  binder.  The  sheets 
can  be  filed  in  alphabetical  order,  or  any  other 
way  desired  for  ready  reference,  doing  away 
with  the  index,  and  with  turning  over  the 
leaves.  Also,  different  styles  of  ruled  sheets 
for  different  classes  of  accounts  can  be  used 
in  the  same  binder  just  as  needed.  For  these 
reasons,  loose  leaf  forms  are  described  through- 
out. 

Books  of  Original  Entry:  We  will  start  out 
by  assuming  that  the  set  of  books  that  we  are 
working  on  has  been  closed  up  on  the  31st  of 
December,  and  that  we  are  starting  out  with 
a  clean  slate  on  the  1st  of  January.  The  first 
books  to  be  used  will  be  the  ones  in  which  the 


IH 


m- 

6           An    Accounting    System 

transactions  are  recorded  before  posting  to  the 
ledger,  called  books  of  Original  Entry,  and  the 
first  of  these  will  be  the  Sales  Book. 

The  Sales  Book:     This,  in  its  usual  form 
consists  of  a  book  in  which  a  memorandum  is 
made  of  each  sale  for  the  purpose  of  making 
the  charge  to  the  customer's  account.     How- 
ever, in  the  Printing  business  the  transaction 
does  not  consist  simply  in  taking  an  article  off 
the  shelf  and  billing  it  right  out ;  any  time  from 
several  hours  to  several  months  may  elapse 
between  the  time  the  order  is  received  until 
the  goods  are  delivered  to  the  customer;  also 
it  is  necessary,  in  this  business,  to  have  other 
totals  beside  the  total  amount  of  sales,  for  the 
purposes  of  accounting.    A  Sales  Book  for  the 
Printing  business   should   have   the   columns 
ruled  as  shown  below  and  on  page  7. 

1                                        SALES  BOOK 

DATK 
TAKEN 

DATK 
BILLED 

CUSTOMER 

JOB 

JOB 
NO. 

I 

I 
I 

5 

5 
5 

3 

John  H.  Dunlap 
Diamond  Mfg.  Co. 

lom  Bill  Heads 
2  Halftones 
50  sh.  Blotting  Paper 
3m  Letter  Heads 

8983 
8984 

For    Printing    Concerns 


B 


The  Order  Number:  At  the  time  each  order 
is  received,  it  should  be  given  a  number,  which 
should  appear  on  the  Job  Ticket,  Sales  Book 
and  on  workmen's  time  tickets.  Many  firms 
follow  the  practice  of  printing  the  order 
number  in  small  type  on  jobs  which  are  likely 
to  be  duplicated  so  as  to  save  time  in  looking 
up  the  records  when  a  duplicate  order  is  re- 
ceived. 

Each  order  is  entered  when  received  as 
illustrated;  the  date  received,  name  of  cus- 
tomer, description  of  order,  order  number  and 
price,  if  same  has  been  quoted  in  advance,  are 
all  filled  in  in  the  proper  columns. 

In  due  course  of  time  the  order  is  finished, 
delivered  to  the  customer  and  the  bill  made 
out.  Then  the  "Date  Billed"  is  filled  in.  This 
column  distinguishes  between  the  "live'*  orders 
and  the  completed  ones  upon  glancing  down 
the  page. 


For  January,  1913 

1 

PHICE 

MDSE. 

XNK 

PRIXTXNG 

PROFIT 

LOSS 

lo  50 
5  00 

985 

3  59 

4  50 
96 

338 

TC 

0    10 

10 
)TALS  VOR  M 

496 

3  43 

OHTH'S  SALE 

1  85 
50 
19 

2  94 

s 

3,48608 
242  50 

804    60 

Transferr 

37  95 
ed  to  Febr 

2.043  37 
uary. 

384  76 

27  10 

27    10 

3.243  58 

35766 

□ 


An    Accounting    System 


Next  comes  the  filling  in  of  the  other  col- 
umns representing  the  cost  of  the  job. 

The  merchandise  column  shows  the  cost  of 
the  stock,  which  should  be  the  price  at  which 
it  was  purchased,  plus  a  percentage  to  cover 
the  cost  of  handling  and  storage.  The  method 
of  figuring  this  item  will  be  taken  up  fully, 
later  on. 

Outside  work,  such  as  ruling,  binding,  en- 
graving or  electrotyping  when  not  done  in  the 
shop  are  charged  to  the  merchandise  account 
and  should  be  included  in  the  amount  in  the 
merchandise  column. 

The  next  column  includes  the  cost  of  ink 
used  on  a  job ;  on  many  jobs  the  quantity  used 
is  too  small  to  be  definitely  determined.  Rules 
for  figuring  this  item  will  also  be  taken  up 
later. 

The  printing  column  includes  the  cost  of 
composition,  presswork,  stock  cutting,  bindery 
work  and  all  other  work  done  in  the  shop  on 
this  order. 

The  last  column  should  show  the  net  profit, 
free  of  all  expenses,  provided  the  preceding 
columns  have  been  correctly  filled  in.  The  or- 
der is  now  ready  to  be  posted  to  the  customer's 
account  in  the  ledger. 

Totaling  the  Month's  Sales:  At  the  end  of 
the  month  the  orders  not  yet  finished  should 


For    Printing    Concerns 


be  transferred  to  the  page  for  the  succeeding 
month  and  the  column  totaled  as  shown. 

The  first  column,  showing  the  total  sales, 
represents  amounts  posted  to  the  customer's 
accounts  on  the  debit  side  of  the  ledger.  In 
accordance  with  the  principles  of  the  double 
entry  system  of  book-keeping,  these  must  be 
balanced  by  corresponding  amounts  on  the 
credit  side,  represented  by  the  totals  of  the 
other  columns.  So,  when  the  five  columns 
have  been  totaled,  the  total  of  the  Loss  column 
should  be  subtracted  from  the  total  of  the 
Profit  column,  the  four  totals  added  together 
and  compared  with  the  total  of  the  Price  col- 
umn, for  if  the  two  totals  are  not  the  same, 
the  books  will  not  balance.    For  example : 

Price,  $3,243.58— Merchandise $804  60 

Ink 37  95 

Printing 2,043  37 

Profit  $384  76 

Loss 27  10 

Net  Profit 357  66 

$3,243.58  $3,243  58 

If  the  totals  are  not  the  same,  it  will  be 
necessary  to  check  over  the  addition  of  the 
columns  and,  if  the  addition  is  correct,  to  check 
the  division  of  the  separate  orders  into  four 
amounts  (Merchandise,  Ink,  Printing  and 
Profit)  to  find  the  one  that  has  not  been  di- 
vided correctly. 


□ 


□ 


10         An    Accounting    System 


When  the  four  columns  balance  the  first, 
the  totals  should  be  posted  to  the  credit  side 
of  the  Merchandise,  Ink,  Printing  and  Loss 
and  Gain  accounts.  The  manner  of  posting 
to  these  and  to  the  customer's  accounts  will 
be  taken  up  in  detail  under  the  subject  of  post- 
ing to  the  Ledger. 

An  important  step  that  has  not  been  fully 
explained  is  that  of  dividing  a  completed  order 
into  the  items  representing  the  cost.  In  print- 
ing offices  having  a  cost  system,  this  is  kept 
track  of  by  the  "Individual  Job  Record,"  or 
"Job  Memorandum  and  Tracer"  as  it  is  often 
called — a  blank  on  which  the  items  of  Stock, 
Engraving,  Electrotyping,  Bindery  Material, 
Ink,  are  entered,  the  time  put  in  on  the  job  is 
posted  each  day  directly  from  the  workmen's 
daily  time  tickets,  and  the  total  time  in  each 
department  is  figured,  according  to  the  charge- 
able hour  method,  at  a  rate  per  hour  which 
covers  Cost  of  Labor,  both  productive  and 
non-productive,  and  all  Office  and  General  ex- 
penses. This  is  the  only  method  that  will 
show  the  cost  of  a  job  accurately.  I  illustrate 
this  form  herewith  and  will  show  how  it  can 
be  made  to  take  the  place  of  the  Sales  Book. 

Individual  Job  Record:  There  are  several 
styles  of  this  blank  now  in  use.  They  all  con- 
sist, essentially,  of  columns  for  each  depart- 


For    Printing    Concerns         11 


ment  for  posting  the  time  from  the  daily  Time 
Tickets,  and  a  column  for  a  summary  of  all 
the  items  entering  into  the  cost  of  the  job.  To 
those  who  are  already  using  a  form  for  this 
purpose,  I  would  say  that  the  only  material 
difference  in  the  blank  illustrated  on  the  next 
page  is  in  the  grouping  of  the  items  of 
the  "Summary  of  Cost"  into  four  groups  in 
order  to  show  the  totals  needed  for  accounting. 
The  blank  illustrated  on  the  next  page 
is  Sy2  X 11,  printed  on  heavy  ledger  stock, 
punched  with  three  holes  in  the  left  hand 
margin.  When  the  order  is  received  the  name 
and  address  of  customer,  description  of  job, 
description  of  stock  (providing  the  stock  has 
already  been  selected)  and  price,  if  same  has 
been  quoted  in  advance,  are  all  entered  and 
the  sheet  is  filed  numerically  in  a  binder  labeled 
"Unfinished  Orders."  For  this  purpose  we  use 
a  binder  with  split  rings  similar  to  that  used 
for  the  loose-leaf  price  books.  Its  great  ad- 
vantage lies  in  the  fact  that  it  is  perfectly  flat 
opening  and  a  sheet  can  be  quickly  removed 
from  any  place  without  disturbing  the  others. 
Experience  has  shown  the  numerical  arrange- 
ment best  for  uncompleted  orders,  as  the  job 
while  in  the  shop  is  always  referred  to  by  num- 
ber, but  it  has  the  disadvantage  that  when  this 
binder  has  a  good  many  sheets  in  it,  it  is  dif- 
ficult to  refer  to  the  record  for  a  given  job  in 


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For    Printing    Concerns  13 


case  the  customer's  name,  but  not  the  number 
is  known.  This  is  overcome  by  keeping  a  sheet 
filled  out  in  the  office  showing  the  name,  num- 
ber and  description  of  each  unfinished  job. 
This  should  be  kept  up-to-date  by  crossing  off 
the  completed  orders  each  day  and  adding  on 
the  new  ones.  This  then  can  be  used  as  an 
index  for  the  "Unfinished  Orders"  binder.  By 
adding  a  space  for  "Date  Promised,''  this  blank 
is  also  valuable  as  a  reminder. 

The  first  thing  done  each  morning  is  to  col- 
lect the  time  tickets  for  the  preceding  day's 
work,  which  are  checked  over,  entered  in  the 
Time  Rook  and  then  posted  to  the  job  records 
in  the  "Unfinished  Orders"  binder.  On  the 
blank  shown,  the  first  column  under  each  de- 
partment is  for  the  date;  second,  employe's 
initials  or  number,  and  in  the  third,  each  figure 
stands  for  an  operation — as  1  for  Hand  Compo- 
sition and  16  for  Lock-up.  The  figures  in  the 
next  column  showing  the  time  are  expressed  in 
hours  and  tenths  of  an  hour  instead  of  hours 
and  minutes.  Thus  the  .7  under  hand  compo- 
sition stands  for  7x6  minutes,  or  42  minutes. 

This  method  has  been  found  a  great  time 
saver  as  a  long  column  of  figures  can  be  added 
much  quicker  where  it  is  not  necessary  to  add 
the  first  two  columns  and  divide  by  60,  as  is 
necessary  where  the  time  is  expressed  in  hours 
and  minutes.    This  also  applies  to  the  multipli- 


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14  An    Accounting    System 


cation  of  amounts  under  "Summary  of  Cost." 
A  great  many  mistakes  are  avoided,  as  anyone 
figuring  both  time  in  sixtieths  and  dollars  in 
decimals  will  be  bound  to  make  mistakes. 

When  the  job  is  completed  and  all  the  time 
has  been  posted,  this  sheet  is  removed  from 
the  unfinished  order  binder,  the  time  columns 
totaled,  the  "Summary  of  Cost"  column  filled 
in  and  totaled,  profit  added,  bill  made  out  and 
date  billed  filled  in,  and  then  the  sheet  is  filed 
alphapetically  in  a  binder  labeled  "Completed 
Orders,"  ready  to  be  posted  to  the  customer's 
account.  The  completed  orders  are  filed  alpha- 
betically for  convenience  in  referring  to  them, 
and  also  for  convenience  in  posting  as  will  be 
shown  when  we  take  up  the  subject  of  posting 
to  the  ledger. 

Posting  direct  from  the  job  record  takes 
care  of  the  charge  to  the  customer's  account, 
but  another  form  is  now  necessary  in  order  to 
give  us  the  totals  for  the  month's  business. 

Monthly  Summary  of  Business:  This  form 
is  printed  on  both  sides  of  an  8J^  x  14  sheet 
and  kept  in  a  sectional  post  key  lock  binder. 
The  job  records  for  the  month's  business 
should  be  posted  to  this  form  in  numerical 
order  and  missing  numbers  checked  by  the 
sheets  in  the  "Unfinished  Order"  binder  to 
make  sure  that  a  sheet  has  not  been  lost  or 


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■*10  An    Accounting    System 


mislaid  between  the  "Unfinished"  and  "Com- 
pleted" order  binders.  The  columns  of  this 
form  should  be  added,  checked  and  posted  as 
shown  for  the  Sales  Book. 

Method  of  Filing  Job  Records:  After  these 
forms  have  been  posted  to  the  customer's  ac- 
count and  "monthly  summary  of  business"  as 
outlined  above,  they  should  be  filed  so  that  any 
given  job  can  be  referred  to  quickly,  as  this 
information  is  of  great  value  in  case  of  dupli- 
cate orders.  They  can  be  filed  in  a  vertical 
letter  file,  with  alphabetical  index  and  folders 
for  each  subdivision.  These  folders  are  sheets 
of  tagboard  17^x11%,  folded  one-half  inch 
out  of  center,  so  that  the  front  measures  8^  x 
IIM,  and  the  back  9%  x  11^.     They  should 


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D 


For    Printing    Concerns 


71^ 


show  the  name,  date  and  job  numbers  on  the 
one-half  inch  strip.  Job  records  for  several 
customers  with  only  one  or  two  sheets  under 
each  name,  should  be  filed  in  a  folder  marked 
"Miscellaneous,"  while  customers  who  have  a 
great  many  job  records  filed  under  their  name 
should  have  two  or  more  folders,  subdivided 
by  date  and  job  numbers.  The  cut,  showing 
the  division  of  the  folders  under  one  letter 
will  explain  the  system  of  fihng.  This  system 
is  very  elastic  and  can  be  made  as  large  or 
small  as  is  required. 

Another  Method  of  Looking  Up  Duplicate 
Orders.  While  the  method  shown  above  has 
been  used  with  entire  success  and  any  previous 
order  can  be  quickly  found  by  taking  a  folder 
out  of  the  file  and  running  over  the  top  lines 
of  the  sheets  in  it,  it  might  prove  troublesome 
in  cases  where  some  accounts  have  a  vast  num- 
ber of  small  jobs,  making  it  necessary  to  run 
through  a  great  many  sheets  to  find  an  old 
order.  So  here  is  another  method  which,  while 
it  requires  a  little  extra  work,  makes  the  old 
orders  much  easier  to  refer  to.  The  individual 
job  records  are  filed  by  number,  preferably  with 
the  job  ticket,  and  the  jobs  are  entered  on  filing 
cards  as  shown  on  pp.  18,  which  are  filed  alpha- 
betically. At  the  start,  one  of  these  cards  is 
made  out  for  each  job,  with  the  date,  quantity 


Ef 


18 


An    Accounting    System 


and  job  number  on  it,  and  these  items  are  en- 
tered each  time  the  job  is  gotten  out.  So  that, 
when  Brown  &  Co.  call  up  and  say,  "Please 
duplicate  our  last  order  for  Letter  Heads,"  the 
cards  in  the  file  for  Brown  &  Co.  are  looked 
through  until  the  one  for  their  letter  head  is 
found.  On  this  card  is  the  number  of  the  last 
order,  and  upon  referring  to  this  number  in  the 
job  ticket  file  is  found  the  job  ticket  and  job 
record.    Another  advantage  of  this  card  index 


Job 

Bii^lHead  3/^3t7 

For 

JOHN  H.  DUNLAP,  JVilUamsport,  Ky. 

DATB 

QUANTITY 

JOB  NO. 

DATE 

QUANTITY 

JOB  NO. 

I9IO 

Jan.  17 
July  23 

5,000 
5,000 

5847 
6283 

1911 
Feb.  1 7 

5,000 

6920 

Aug.  I 
Dec.  12 

5,000 
5,000 

7126 
7642 

1912 
May  17 

10,000 

80II 

1913 
Jan.  5 

10,000 

8983 

is  that  after  three  or  more  entries  have  been 
made  on  a  card,  it  is  possible  by  noting  the  time 
that  has  elapsed  between  the  entries  to  tell 
when  a  job  is  due  to  be  gotten  out  again. 

Of  course,  if  Brown  &  Co.  have  a  great  many 
different  jobs,  and  none  of  them  gotten  out 
oftener  than  once  or  twice  a  year,  there  would 


For    Printing    Concerns         19 


be  just  about  as  many  cards  to  look  through  as 
there  would  be  job  tracers  by  the  first  method 
and  all  the  time  spent  in  filHng  out  the  cards 
would  be  wasted.  On  the  other  hand,  if  Brown 
&  Co.  had  a  number  of  jobs  which  they  were 
re-ordering  every  month  or  so,  the  number  of 
sheets  to  look  through  would  be  much  less. 
So  I  give  both  these  methods  without  recom- 
mending either,  and  you  can  select  the  one  best 
suited  to  your  shop. 

Sales  Not  Entered  on  Job  Records.  In  some 
offices,  part  of  the  sales  may  consist  of  goods 
printed  in  advance,  put  in  stock  and  sold  from 
stock;  or  electrotypes,  or  blank  paper  stock 
and  envelopes,  for  w^hich  it  is  not  desired  to 
make  out  Job  Records.  In  case  such  sales  are 
very  numerous,  it  is  a  good  plan  to  keep  a  sales 
book  to  be  used  only  for  these  entries,  or  a  loose 
leaf  sheet  may  be  used  with  the  same  rulings 
as  shown  for  the  Sales  Book,  and  the  sheet  for 
each  month's  sales  filed  in  the  same  binder  as 
the  "Monthly  Summary  of  Business." 

The  Cash  Book:  This  book,  second  in  im- 
portance only  to  the  Sales  Book,  shows  all 
money  received  and  from  whom  received  on 
the  debit  side;  and  all  money  paid  out  and  for 
what  paid  on  the  credit  side.  A  hard  point 
to  understand  for  anyone  not  familiar  with 


□ 


0f 


20 


An    Accounting    System 


double  entry  book-keeping  is  that  an  amount 
appearing  on  the  debit  of  the  cash  book  is 
posted  to  the  credit  side  of  the  ledger  and  one 
appearing  on  the  credit  side  to  the  debit  side 
of  the  ledger. 

Here  is  how  the  transactions  would  be  en- 
tered in  case  no  Cash  Book  was  used: 


Jan.  31 


31 


Received  of  Brown  &  Co.  on  account, 
the  sum  of  Five  Dollars. 

(Debit)  Cash $5  00 

(Credit)  Brown  &  Co $5  00 

Paid  Jones  &  Co.  on  account,  the  sum 
of  Three  Dollars. 

Jones  &  Co 3  00 

Cash 3  00 


DEBIT 

Jan.  31    Brown  &  Co. 


(Ledger  Account) 
CASH 

CREDIT 

$5  00  Jan.  31    Jones  &  Co.,    $3  00 


So  the  cash  book  can  be  compared  to  an 
account  in  the  ledger,  and  the  effect  is  the  same 
as  if  we  had  posted  an  entry  to  the  debit  side 


Dr. 


CASH  BOOK 


Jan. 


Amount  forward 

John  H.  Dunlap,  in  full 


3.453  77 
27  00 


3.480  77 


3.480  77 


For    Printing    Concerns 


21 


IS 


of  this  account  for  the  cash  received  and  to  the 
credit  side  of  the  account  of  the  customer  from 
whom  received.  For  this  reason  the  balance 
of  cash  on  hand  belongs  in  the  trial  balance  just 
the  same  as  a  ledger  account. 

The  entries  on  the  debit  side  of  the  cash 
book  consist  almost  entirely  of  customer's 
names  and  amounts  received  from  them,  and 
many  of  the  entries  on  the  credit  side  consist 
of  creditor's  names  and  amounts  paid  them. 
On  the  credit  side  also  appear  the  amounts  paid 
for  Pay  Roll  and  small  items  of  expense  from 
day  to  day,  such  as  stamps,  carfare  and  other 
incidentals.  When  we  take  up  the  ledger  ac- 
counts, we  will  enumerate  the  items  which 
should  be  charged  to  each  account,  and  the 
rules  laid  down  there  should  be  followed  as 


Cr. 


For  January,  1913 


Jan. 


Amount  forward 
Car  Fare— 10-  10-10 
Pay  Roll — for  week 
Office  Expense— Pay  Roll 
Stock  Handling— Pay  Roll 
Am.  Type  Fdrs.  Co.,  in  full 
Advertising — StampvS 
Stat'y  &  Postage— Stamps 
Mch.  Comp.  Ex.— Gas  Bill 

Haul'g  &  Car  Fare,  for  mo. 

Balance  on  hand 


22  50 
30 


1,801  84 
211  75 

3  50 
276  50 
5  00 
2  00 
356 

22  80 


2.344  45 
136  32 

3.480  77 


0J 


22  An    Accounting    System 


closely  as  possible  in  making  the  entries  for 
cash  paid  out.  On  pages  20  and  21  we  give 
an  example  showing  a  few  Cash  Book  entries. 

Monthly  Distribution  of  Current  Bills:  This 
form  is  used  for  the  purpose  of  entering  the 
invoices  for  the  month,  charging  Merchandise, 
Ink,  Investment  or  Expense  with  amount  of 
goods  purchased,  and  crediting  the  accounts  of 
those  whom  we  owe.  When  an  invoice  is  re- 
ceived, it  should  first  be  checked  by  the  one  who 
received  the  goods  as  to  whether  the  quantity 
called  for  by  the  invoice  was  received,  and  as 
to  whether  received  in  good  order.  Then  some 
one  in  the  office  should  see  that  the  prices,  ex- 
tensions and  totals  are  correct;  make  a  note  on 
the  invoice  of  the  account  it  is  to  be  charged 
to ;  and  file  it  alphabetically.  While  all  the  bills 
of  an  ink  concern  are  usually  charged  to  ink, 
and  those  of  a  paper  house  to  merchandise, 
there  are  many  others  which  are  not  so  easily 
classified,  so  it  is  the  best  rule  to  mark  to  what 
it  is  to  be  charged  on  the  invoice  at  the  time 
it  is  O.  K'd.  At  the  end  of  the  month,  each 
firm's  monthly  statement  should  be  checked  by 
the  bills  in  the  file,  and  the  total,  if  found  cor- 
rect, entered  opposite  that  firm's  name  in  the 
first  column  of  the  "Monthly  Distribution  of 
Current  Bills"  form.  The  blank  which  we  illus- 
trate is  Syi  x  14  inches,  punched  just  like  the 


«5) 


i- 


T 


ni 


o 


=3 


11 


**)     '0     fn 
s>     —      ». 


V>       0       ^       p-      OO      U)       O 

lo)   :s    N    "^   -^      '    o 


ED 


24  An    Accounting    System 


"Monthly  Summary  of  Business,"  so  that  it  can 
be  filed  in  the  same  binder.  Offices  using  the 
Cost  System  can  also  file  their  ''Monthly  Sum- 
mary of  Cost"  in  this  binder. 

When  the  total  amount  due  a  concern  has 
been  entered  in  the  first  column,  the  bills  should 
be  separated  according  to  the  accounts  to 
which  they  are  to  be  charged,  these  amounts 
added  together  to  see  that  they  balance  with 
the  total,  and  then  they  should  be  put  down  in 
the  columns  where  they  belong.  There  are  so 
many  different  accounts  to  which  the  monthly 
bills  can  be  charged,  that  to  print  headings  for 
every  one  would  make  a  very  long  blank,  so  it 
has  been  found  to  be  the  best  plan  to  print  the 
headings  only  for  the  columns  that  are  used 
every  month,  such  as  Merchandise,  Ink,  etc., 
and  leave  the  headings  of  the  others  blank,  to 
be  filled  in  as  needed.  When  all  the  bills  have 
been  entered,  the  columns  all  should  be  totaled, 
and  the  sum  of  the  totals  of  all  the  other  col- 
umns compared  with  the  total  of  the  first  col- 
umn to  prove  the  work,  just  as  is  done  with  the 
''Monthly  Summary  of  Business."  Then  the 
amount  due  each  firm  should  be  posted  to  the 
credit  side  of  their  account  in  the  ledger,  and 
the  totals  of  the  columns  posted  to  the  debit 
side  of  the  ledger  account,  the  title  of  which  is 
written  at  the  heading  of  the  column. 

In  each  month's  bills  will  usually  be  found 


ID 


For    Printing    Concerns  25 


several  bills  for  small  amounts  from  firms  with 
which  it  is  not  deemed  worth  while  to  open 
accomits.  In  this  case,  it  is  just  as  well  not  to 
enter  these  bills  on  the  monthly  sheet,  but  to 
charge  them  to  the  account  to  which  they  be- 
long in  the  Cash  Book  when  paid.  This  prac- 
tice, however,  should  never  be  carried  to  such 
an  extent  as  to  make  any  great  difference  in 
the  amount  of  the  Accounts  Payable. 

The  Journal:  The  entries  in  this  book  con- 
sist of  all  the  entries  that  are  not  taken  care  of 
by  the  other  books.  Each  entry  consists  of  a 
memorandum  of  a  transaction,  with  entries 
showing  the  debits  and  credits  arising  from 
that   transaction   for   posting  to   the   Ledger. 

In  teaching  double  entry  bookkeeping  at  the 
Commercial  Schools,  the  student  is  first  taught 
to  keep  three  books ;  the  Day  Book,  the  Journal 
and  the  I^edger.  The  first  book  contains  a 
memorandum  of  each  transaction  as  it  occurs, 
as  follows: 

DAY  BOOK 

Jan.  3     Sold    to    John    H.    Diinlap,    Williamsport,    Ky., 

10,000  Bill  Heads $10  50 

5  Received  of  Brown  &  Co.,  in  full  of  acct 5  00 

6  Bought   of    National    Paper    Co.,    one   ream    of 

paper 6  25 

In  the  second  book,  called  the  Journal,  the 
transactions  in  the  Day  Book  are  analyzed,  and 


Bf 


26  An    Accounting    System 


the  debits  and  credits  arising  from  them  en- 
tered for  posting  into  the  Ledger,  as  follows : 

JOURNAL 

Jan.  3    John  H.  Dunlap $10  50 

Merchandise  $3  59 

Ink 10 

Printing  4  96 

Loss  and  Gain 1  85 

5  Cash   5  00 

Brown  &  Co 5  00 

6  Merchandise  6  25 

National  Paper  Co 6  25 

The  Student  is  next  taught  how,  by  group- 
ing all  transactions  of  one  kind  together,  as  in 
the  Sales  Book,  Cash  Book,  and  Distribution 
of  Current  Bills,  the  number  of  entries  and 
amount  of  work  required  is  greatly  reduced. 
In  the  Sales  Book  and  Distribution  of  Current 
Bills  the  credits  for  a  number  of  transactions 
are  all  posted  at  one  time,  while  in  the  Cash 
Book,  the  entry  is  the  same  as  a  Ledger  entry, 
and  the  debit  or  credit  is  posted  directly  from 
it. 

But  there  still  remain  some  transactions  not 
taken  care  of  by  the  other  books  and  forms, 
and  these  have  to  be  entered  in  a  manner  simi- 
lar to  that  described  above.  However,  only 
one  book  is  necessary,  the  Journal,  which  will 
carry  the  debits  and  credits,  and  a  brief  memo- 
randum of  the  transaction. 


For    Printing    Concerns 


27 


It  differs  from  the  other  books  in  that  each 
entry  is  complete  in  itself,  and  the  book  does 
not  require  footing  and  posting  of  totals,  but 
each  entry  must  balance  or  it  will  put  the 
ledger  out  of  balance. 

Here  are  some  of  the  transactions  which 
are  entered  in  the  Journal,  and  the  manner  of 
entering  them: 

A  note  received  or  given  in  settlement  of 
an  account. 

Merchandise  (other  than  printing,  ink,  pa- 
per stock,  or  the  items  which  are  entered  in 
the  Sales  Book)  sold  on  account. 

Merchandise  received  on  account,  other 
than  current  purchases. 


JOURNAL,  January^  19/j 


3 

Bills  Receivable 

Diamond  Mfg,  Co. 
Received  their  uote  at  go  days  in  full 
of  account. 

8 
Barnhart  Bros.  &  Spindler 

Comp.  Room  (investment) 
Received  credit  memo  for  shipment  of 
old  type,  etc. 

12 
Metal  Investment 

Smith  Printing  Co. 
Linotype  metal  returned. 

14 

AmericaH  Type  Founders  Co. 

Bdy  B  Expense 
3t  empty  sp>ools  returned 

31 

National  Paper  Co. 
Bills  Payable 
Our  note  at  90  days  in  full  of  account. 


351    25 


1869 


3268 


3  10 


'2^9  76 


C-r 


351 25 


18  69 


3268 


3  to 


1219  76 


El 


28  An    Accounting    System 


The  Ledger:  In  this  book  the  various 
entries,  showing  amounts  owing,  amounts 
owed,  expense  and  all  other  information  in 
regard  to  the  financial  side  of  the  business  are 
taken  from  various  books  in  which  they  orig- 
inate as  shown  on  the  preceding  pages  and 
classified  under  various  headings  called  ac- 
counts. In  this  book  cash  received  and  paid 
out  is  balanced  against  amounts  owing  and 
amounts  owed.  From  it  are  taken  statements 
showing  amounts  due  from  customers,  trial 
balances  in  order  to  discover  errors  in  book- 
keeping, and  annual  or  semi-annual  balance 
sheets,  showing  Profits  and  Losses  and  the 
condition  of  the  business. 

We  will  divide  the  accounts  in  the  ledger 
into  three  classes.  Accounts  Receivable,  Ac- 
counts Payable  and  Financial  Accounts  (show- 
ing investments,  expenses,  profits  and  losses). 
Each  class  of  accounts  will  be  taken  up  sepa- 
rately and  the  manner  of  making  entries 
(called  posting)  explained. 

Chart  illustrating  a  set  of  books  for  the  Print- 
ing Business — showing  how  the  various 
entries  comprising  a  month's  business  are 
posted  into  a  ledger  and  there  classified 
under  various  accounts,  for  the  purpose  of 
showing  resources   and  liabiHties,   losses 


For    Printing    Concerns 


29 


and  gains,  and  the  items  entering  into  the 
cost  of  doing  business : 


Job  Rkcords  and 
MowTHLY  Summary. 


Debit. 

Charge 

customers 

with 

amount 

due  for 

work 

done. 


Credit. 
Paper,  ink 

and 
printing 
accounts 

with 

amount  of 

sales,  loss 

and   gain, 

with 

profit.s. 


Thb  Cash  Book. 


Monthly  Distribu- 
tion OF 
Current  Bills. 


Debit. 

Cash 

received 

and  credit 

account  of 

customers 

from 

whom 

received. 


Credit. 

Cash  paid 

out  and 

debit 
accounts 

of 
creditors 
to  whom 
paid,  or 
expense. 


Debit. 
Invest- 
ment, 
paper .  ink 

or 
expense, 

with 

amount 

of 

purchases 


Credit. 
Accounts 

of 
creditors, 

with 

amounts 

due. 


The  Journal. 

(Various  unclassified 
entries,  each  complete 
in  itself.) 


THE  LEDOCR. 


AccoaivTS  AND  Bills  Receivable. 
(Accounts  with  debtors.) 


Debit. 

Showing  amount 

due. 


Credit. 
Showing  cash  received 
on  account. 


ACCOUNTS  AND  BZLI4>  PAYABLK. 

(Accounts  with  creditors.) 


DeMt. 

Showing  cash  paid  on 

account. 


Credit. 

Showing  amount 

owed. 


Expense. 

PAY   ROLL— 

Debit— s)xovnnz  amount  paid 
for  wages. 

GENERAL  EXPENSE— 

Subdivided  into  Office  Ex- 
pense,Insurance  and  Taxes, 
Advertising  and  Selling.Sta- 
tionery  and  Postage,  Haul- 
ing and  Carfare,  Heat  and 
Water,  I<ight  and  Power, 
Rent.  Spoiled  Work,  etc. 

ZJifA?/ —showing  amount  paid 
for  these  expenses. 

DEPARTMENT   EXPENSE— 

Debit — showing  amounts  paid 
for  supplies,  etc.,  charge- 
able direct  to  each  depart- 
ment. 


FINANCIAL  ACCOUNTS. 


Merchandise— Ink. 
Debit—  Credit— 

showing  showing 

amount  paid    amount  of 
for  these  monthly    ■ 

items.  sales. 

Printing. 
C r e d 1 1  —  %hovf\n%   monthly 
sales. 

Interest  and  Discount. 
Debit—  Credit— 


showing 
amounts 
paid  for 
interest  and 
discount. 


showing 
amounts 
received  for 
interest  and 
discount. 


Investment. 
Debit—  Credit— 

showing  showing 

purchases  of    amounts 
machinery,       charged  off 
type,  etc.  for  deprecia- 

tion. 
Capital  Stock. 
Credit  —  showing  liability  of 
the  business  for  money  in- 
vested. 

Undivided  Profits. 
Credit — showing  liability  of 
the  business  for  profits  not 
paid  out  in  dividends. 

IvOSS  AND  Gain. 
Showing  profits  on  monthly 
sales.    All  accounts  closed 
into  this  at  end  of  year. 


0f 


30  An    Accounting    System 


Accounts  Receivable:  Under  this  heading 
come  the  accounts  for  amounts  due,  including 
an  account  called  Bills  Receivable  for  notes 
due. 

The  rule  usually,  though  not  always,  fol- 
lowed for  posting  to  the  ledger  is  that,  in 
the  explanation  column  of  the  ledger  should 
appear  the  name  of  the  other  account  on  the 
other  side  of  the  ledger  to  which  the  same 
entry  was  posted.  However,  there  is  much 
more  useful  information  that  can  be  put  in 
this  space,  such  as  the  job  number  or  initials 
of  the  book  from  which  the  amount  is  posted, 
in  the  receivable  accounts,  and  so  on  through 
all  the  other  accounts.  This  method  is  fol- 
lowed throughout. 

The  Loose  Leaf  Ledger  is  economical  of 
both  time  and  labor. 

In  this  ledger  the  accounts  are  arranged 
alphabetically,  and  as  the  job  records  are  alpha- 
betically filed  in  the  completed  order  binder, 
it  is  possible  to  start  posting  at  A  and  finish 
at  Z  without  loss  of  time  turning  over  pages 
or  looking  up  page  numbers  in  an  index. 

The  job  records  are  posted  to  the  customer's 
accounts  in  the  manner  shown  on  page  31,  giv- 
ing date,  job  number  and  price,  and  as  each  one 
is  posted  it  should  be  marked  in  some  manner 
to  show  that  it  has  been  posted.  In  case  the 
Ledger  is  a  bound  book,  the  number  of  the 


For    Printing    Concerns 


31 


IH 


page  should  be  put  on  the  job  tracer;  if  a 
loose-leaf  ledger  is  used,  a  small  rubber  stamp 
"Posted,"  as  shown  on  the  job  tracer  on  pp.  12, 
is  very  convenient.  If  some  entries  are  posted 
from  a  sales  book  the  items  should  be  posted 
like  the  second  entry  in  the  account  below,  giv- 
ing the  number  of  the  sales  book  page.  When 
the  account  is  paid,  the  entry  in  the  cash  book 
(shown  on  page  20)  should  be  posted  to  the 
credit  side  and  the  account  ruled  off  as  shown. 


DUNLAP,  JOHN  H., 

Williamsport,  Ky. 
1913 

Jan. 

5 

5 

9 

16 

8983 
SB— I 
9027 
9012 

10  50 
615 
4  35 
6  00 

Jan. 

30 

CB-4 

37  00 

27  00 

27  00 

In  the  account  shown  above,  the  job  is 
posted  by  number  and  not  by  item.  This 
makes  it  well  nigh  impossible  to  refer  to  this 
job  by  looking  in  the  ledger,  in  the  case  of 
receiving  a  duplicate  order.  With  the  indi- 
vidual job  records,  this  is  taken  care  of  by 
filing  them  so  they  can  be  readily  referred  to 


GJ 


32 


n 


Accounting    System 


as  shown  on  page  16,  but  this  is  not  possible 
if  the  jobs  are  entered  in  a  sales  book.  In  this 
case  it  is  best  either  to  use  the  card  index  or 
to  post  the  item  to  the  ledger  as  shown  below. 


DUNLAP,  JOHN  H., 

Williamsport,  Ky. 
1913 

Jan. 

5 
5 
6 

9 
16 

lom  Bill  Heads 
2  Halftones 
20  sh.  Blotting 
im  Let.  Heads 
3m  Cards 

89»3 

Si 

Si 

9027 

9012 

10  50 
5  00 
I  15 
4  35 
600 

Jan. 

30 

CB— 4 

27  00 

27  00 

27  00 

When  this  is  done  it  is  possible  to  find  the 
job  by  looking  through  the  account  in  the 
ledger  in  case  a  duplicate  order  is  received,  and 
it  is  necessary  to  refer  to  the  previous  order  for 
sample  of  job,  quantity,  price,  etc. 


Miscellaneous  Accounts:  Cases  frequently 
occur  of  customers  who  have  three  or  four 
entries  a  year  or  less  and  it  is  not  advisable  to 
open  separate  accounts  with  them.  These  ac- 
counts are  taken  care  of  by  a  miscellaneous 


For    Printing    Concern 


33 


10 


account,  as  shown  below.  In  case  these  entries 
are  numerous,  under  one  or  more  letters,  the 
miscellaneous  account  can  be  subdivided  as 
often  as  necessary.  In  the  miscellaneous  ac- 
count the  account  is  headed  B-Miscellaneous 
(or  B-a  to  B-o  Miscellaneous,  as  the  case  may 
be)  and  in  posting  the  customer's  name  is 
written  in  the  explanation  column  and  the  job 
number  in  the  small  column  generally  used 
for  page  numbers. 


1913 


Dato  Di 
MISCELLANEOUS 


Jan, 


Dilger,  Jos.  W. 
Donner,  Chas. 
Denver  Oil  Co. 
Dillon,  B. 


S984 
9106 

9131 
9181 


3  50 
3  00 
6  00 

2  33 


For  the  Bills  Receivable  and  Payable,  a  book 
should  be  kept  in  which  each  note  is  entered 
together  with  date  due,  etc.  If  this  is  not  done, 
the  entry  in  the  Bills  Receivable  account  can 
carry  the  necessary  information. 

This  same  method  can  be  used  to  advantage 
with  the  Bills  Payable  account. 


u 


34         An    Accounting    System 


19*3 


BILLS  RECEIVABLE 


Jan. 


Mfg.  Co.,  90  days 


Ji 


351  25 


Accounts  Payable:  The  amount  in  the  ac- 
count shown  below  is  posted  from  the  "Dis- 
tribution of  Current  Bills,"  shown  on  page  23, 
and  the  Bills  Payable  entry  closing  the  account 
from  the  Journal  entry  on  page  27. 


NATIONAL  PAPER  CO. 


1913 


Jan. 


31 


Bills  Payable 


1,249  76 


Jan. 


31 


Mo.  bills 


1,249  76 


For    Printing    Concerns  35 


Financial  Accounts:  We  will  name  first  the 
principal  accounts,  also  the  minor  accounts 
which  come  under  the  general  headings  of 
Investment,  Department  Expense  and  General 
Expense : 

Merchandise 

Ink 

Printing 

Pay  Roll 

Interest  and  Discount 

Loss  and  Gain 

Undivided  Profits 


II 


^     .    ,  «      ,  I  (for  Corporations) 

Capital  Stock         ^  ^  ^  ^ 

General  Expense: 

Office  Expense 

Insurance  and  Taxes 

Advertising  and  Selling 

Stationery  and  Postage 

Hauling  and  Carfare 

Heat  and  Water 

Light  and  Power 

Rent  (if  building  is  rented) 

Spoiled  Work 
Department  Expense 

(Under  this  heading  an  account  with 
each  department.) 
Investment 

(Under  this  heading  an  account  with 
Real  Estate,  if  building  is  owned, 
also  with  office,  and  with  each  de- 
partment of  the  shop.) 


Bf 


An    Accounting    System 


While  this  seems  like  a  large  number  of 
accounts,  experience  has  shown  that,  in  the 
large  offices,  it  is  the  smallest  number  that  will 
give  the  information  required  for  filling  out  of 
cost  summaries,  or  that  will  give  full  informa- 
tion as  to  the  cost  of  doing  business  for  those 
offices  which  do  not  use  the  cost  system.  In 
the  smaller  offices  the  number  of  accounts  can 
be  much  reduced  by  combining  many  of  the 
expense  accounts  and  by  not  keeping  accounts 
with  so  many  different  departments.  The 
keeping  of  a  larger  number  of  accounts  does 
not  necessarily  involve  a  great  deal  more  work, 
as  the  number  of  original  entries  is  the  same, 
the  larger  number  of  accounts  only  giving 
more  thorough  division  of  the  items  and  avoid- 
ing careless  methods  of  distributing  expense 
when  everything  is  charged  to  one  general  ex- 
pense account,  or  to  a  few  subdivisions. 

We  will  now  take  up  the  matter  of  just  what 
entries  are  to  be  posted  to  each  account,  tak- 
ing the  accounts  up  in  the  order  named  above. 

Merchandise:  This  account  should  be 
charged  with  all  purchases  of  stock  and  ma- 
terials coming  under  the  headings  enumerated 
on  the  individual  job  record.  The  items  of 
ruling  and  binding  are  intended  of  course,  for 
offices  which  have  this  work  done  at  the  trade 
binderies.     Cost-system  offices  will  often  find 


For    Printing    Concerns         37 


that  they  can  have  this  work  done  at  a  much 
lower  price  than  they  could  afford  to  do  it 
themselves. 

In  charging  purchases  of  electrotypes  to  this 
account,  care  should  be  taken  to  distinguish 
between  electrotypes  bought  for  a  particular 
job,  and  figured  into  the  cost  of  the  job,  and 
stock  cuts  and  logotypes,  which  should  be 
charged  to  Investment-Type,  or  if  the  invest- 
ment in  them  is  enough  to  warrant  a  separate 
account,  Investment-Electros. 

To  the  credit  of  this  account  will  be  posted 
the  totals  of  Monthly  Sales  from  the  ''Monthly 
Summary  of  Business"  or  Sales  Book,  also 
amounts  from  Journal  or  Cash  Book  for  sales 
not  shown  on  the  job  tracer  or  Sales  Book. 

If  any  considerable  amount  is  invested  in 
counters,  shelves  or  bins  for  stock,  or  stock 
trucks,  this  amount  should  be  carried  under  a 
separate  account,  entitled  Investment-Stock 
Storage.  Also  if  any  considerable  amount  is 
paid  out  monthly  for  help  for  handling,  moving 
and  stacking  stock  (for  porter  hire,  etc.),  an 
expense  account  should  be  kept  entitled  Stock 
Handling.  And  in  figuring  Cost  of  stock  sold, 
the  following  items  should  be  figured  up  and 
it  will  be  easy  to  tell  what  percentage  this  is 
of  yearly  sales,  and  this  percentage  should  be 
added  to  the  price  at  which  purchased  in  figur- 
ing selling  cost: 


13 


0J 


38  An    Accounting    System 


Interest,  insurance  and  taxes  on  amount  in- 
vested in  stock. 

Interest,  depreciation,  insurance  and  taxes 
on  amount  invested  in  trucks,  counters  and 
shelves. 

Cost  of  handling  stock. 

A  proportion  of  the  rent,  according  to  the 
amount  of  floor  space  used  for  stock  storage. 

Ink:  This  account  should  be  charged  with 
monthly  purchases  of  all  kinds  of  ink,  var- 
nishes and  reducers  and  credited  with  the 
monthly  totals  from  the  Monthly  Summary  of 
Business,  and  when  the  yearly  balance  sheet  is 
taken  it  will  be  easy  to  tell  whether  large 
enough  amounts  are  being  allowed  for  this 
item.  In  figuring  ink  on  each  individual  job, 
on  all  work  where  it  is  possible,  the  right  way 
is  to  find  out  just  how  much  ink  the  job  took 
and  figure  accordingly,  but  for  most  ordinary 
type  jobs  it  is  hard  to  say  just  how  much  ink 
was  used,  though  in  the  aggregate  the  ink  on 
these  jobs  amounts  to  quite  a  sum.  In  these 
cases  this  schedule  has  been  used  to  advantage, 
the  ink  account  coming  out  all  right  at  the  end 
of  the  year: 

Platen  Press,  black— 1,000  or  less,  .02 ;   5,000,  .10 :   10,000,  .20 
Colors— 1,000  or  less,  .10;   5,000,  .25;   10,000,  .40 
Cylinder  Press,  black— 1,000  or  less,  .25 ;   5,000,  $1.00 
Colors— 1,000  or  less,  .40 ;   5,000,  $1.50 

It  is  understood  that,  where  a  job  takes  a 


□ 


For    Printing    Concerns  39 


pound  of  ink  or  more,  the  pressman  should 
report  the  amount  used,  and  this  amount 
should  be  figured  instead  of  using  the  schedule. 

Printing:  To  the  credit  side  of  this  account 
should  be  posted  the  totals  from  the  Monthly 
Summary  of  Business,  representing  credits  for 
work  done.  The  manner  of  closing  this  ac- 
count, to  show  profit  or  loss  at  the  end  of  the 
year,  will  be  explained  later. 

Pay  Roll:  This  account  should  be  debited 
each  week  with  the  amount  of  the  pay  roll, 
with  the  exception  of  errand  boy,  or  office 
force,  which  should  be  posted  to  Office  Ex- 
pense; or  labor  handling  stock,  which  should 
be  posted  to  Merchandise,  or  to  Stock  Hand- 
ling and  Storage  if  a  separate  account  is  kept 
with  that  item. 

Interest  and  Discount:  The  debit  side  of 
this  account  should  show  interest  paid  out, 
discounts  to  customers,  etc.,  and  the  credit  side 
discount  on  current  bills  and  interest  received. 

Loss  and  Gain:  To  this  account  should  be 
posted  the  total  profit  or  loss  on  the  monthly 
business  from  the  "Monthly  Summary  of  Busi- 
ness." The  debit  side  should  show  rebates  and 
deductions  to  customers,  spoiled  work,  and  bad 


Of 


40  An    Accounting    System 


accounts,  unless  it  is  desired  to  keep  separate 
accounts  with  these  items.  The  manner  of 
closing  this  account  at  the  end  of  the  year's 
business  to  show  the  final  profit  or  loss  is  taken 
up  under  the  heading  of  Closing  of  Accounts. 

Undivided  Profits:  This  account  shows  the 
balance  of  the  net  profit  after  deducting  divi- 
dends, and  may  represent  the  amount  paid  out 
during  the  year  for  new  machinery,  type  and 
fixtures  over  and  above  the  amount  charged  off 
for  depreciation;  or  it  may  represent  money 
tied  up  in  accounts  or  bills  receivable  which  is 
not  available  for  dividends.  In  the  first  in- 
stance, it  shows  the  investment  of  that  much 
of  the  profits  in  the  plant.  The  entries  to  this 
account  are  made  after  the  balance  sheet  and 
closing  of  accounts,  or  when  dividends  are  de- 
clared. 

Capital  Stock:  This  account  represents  a 
fixed  amount  equal  to  the  amount  of  stock  out- 
standing, and  does  not  vary  with  the  fluctua- 
tions of  the  net  capital  as  shown  on  the  balance 
sheet.  This  account  appears  in  the  yearly  bal- 
ance sheet  as  a  liability  to  offset  the  resources 
of  real  estate,  machinery,  fixtures,  etc.  For 
a  private  business  or  partnership,  accounts 
would  be  kept  with  the  owner  or  partners 
showing  amounts  invested,  credit  for  profits 


For    Printing    Concerns  41 


and  debit  for  amounts  withdrawn  instead  of 
the  Undivided  Profits  and  Capital  Stock  ac- 
counts. 

Dividing  the  Plant  into  Departments:  This 
is  quite  an  important  step  in  the  division  of 
expenses  and  keeping  of  cost  records.  We  will 
start  out  with  the  smallest  sized  plant,  one  em- 
ploying but  one  man.  Part  of  his  time  will  be 
spent  in  setting  type,  part  in  feeding  a  press, 
and  part  in  making  out  bills,  keeping  books, 
chasing  after  orders  and  dollars.  The  time 
spent  in  the  last  three  avocations,  in  order 
that  it  may  be  paid  for  by  the  customer,  must 
be  included  in  the  rate  per  hour  at  which  the 
time  spent  on  the  work  is  charged. 

Now,  the  time  spent  in  setting  type  will  be 
followed  by  time  spent  in  distribution  which 
is  not  charged  for;  type  is  expensive  and  soon 
wears  out,  so  this  time  is  worth  more  than  the 
time  spent  in  feeding  a  press.  So  the  smallest 
sized  shop  would  have  two  departments,  the 
Composing  Room  and  Pressroom,  with  differ- 
ent rates  per  hour.  To  one  would  be  charged 
proof  paper,  lye,  etc.,  and  to  the  other  rags, 
oil,  benzine,  etc. 

As  the  size  of  the  shop  increases,  the  num- 
ber of  departments  increases.  When  we  come 
to  a  shop  with  a  bindery,  we  have  the  mens' 
work  and  the  girls'  work  with  different  rates 


El 


SI 


42  An    Accounting    System 


per  hour  on  account  of  difference  in  wages  and 
expenses.  Under  the  girls'  work  come  stitch- 
ing, punching,  round  cornering,  numbering, 
etc.;  machine  work  with  power  and  overhead 
expenses  which  require  a  different  rate  per 
hour  from  ordinary  hand  work,  such  as  fold- 
ing, gathering  or  sewing.  These  two  depart- 
ments are  usually  known  as  Bindery  B  (ma- 
chine work)  and  Bindery  C  (hand  work),  while 
the  mens'  work  is  called  Bindery  A.  Getting 
out  and  cutting  stock  is  called  Stock  Room 
Work. 

There  are  many  special  machines  which  do 
not  come  under  the  general  headings,  such  as 
bronzing,  book  sewung,  and  folding  machines ; 
rotary  perforators,  die  cutting  machines,  uni- 
versal, Harris,  or  offset  presses. 

Each  machine  or  group  of  machines  upon 
which  it  is  necessary  to  keep  a  separate  cost 
should  have  an  account  showing  the  amount 
invested,  and  another  to  which  the  repairs  and 
items  of  expense  belonging  directly  to  that  de- 
partment are  charged. 

Department  Expense:  Under  this  title 
should  be  kept  accounts  with  every  depart- 
ment, so  that  the  total  can  be  used  in  figuring 
the  cost  in  each  department.  Below  I  give  a 
list  of  departments  for  example,  with  items 
which  should  be  charged  to  each. 


m 

For    Printing    Concerns          431— 

Hand  Composition — Proof  paper,  benzine, 
benzine  brushes,  lye. 

Machine  Composition — Gas,  repairs,  cost  of 
pigging  metal. 

Cylinder  Pressroom — Rollers,  repairs,  rags, 
benzine,  lubricating  oil,  tympan  paper. 

Platen  Pressroom — Same  as  Cylinder 

Folding  Machines — Tape,  repairs. 

Stock     Cutting — Knife     grinding,     cutting 
sticks,  repairs. 

Men's  Bindery  Work — Glue,  etc. 

Girl's    Machine   Work — Stitcher    wire,   re- 
pairs. 

Girl's  Hand  Work — Paste,  glue,  cotton  for 
bronzing,  thread  for  sewing. 

Investment:     Under  this  heading  accounts 
with  the  departments,  as  given  above,  or  as 
will  apply  to  your  shop.     For  these  accounts, 
if  the  ledger  is  a  loose-leaf  one,  would  suggest 

CYLINDER  PRESSROOM 
19x3                                                              Investment 

Jan. 
Feb. 

5 
5 

Inventory 
Miehlie,  26  x  40 
Motor,  3  h.  p. 

5.097  97 

2,650  00 

135  00 

r—"  44 


An    Accounting    System 


the  use  of  sheets  with  extra  width  debit  col- 
umn. Then,  as  purchases  are  made,  for  the 
larger  items  a  description  of  the  item  itself 
could  be  written  in  the  debit  column,  along 
with  the  amount  paid,  thus  this  account  will 
always  be  a  live  inventory  of  the  plant,  show- 
ing date  each  item  was  bought,  amount  paid, 
etc.,  and  the  credit  side  showing  the  charges 
against  this  amount  for  depreciation.  The 
manner  of  taking  care  of  depreciation  will  be 
illustrated  in  the  chapter  devoted  to  Final 
Closing. 

We  illustrate  such  an  account,  which  ex- 
ample will  serve  for  all. 

General  Expense — Office  Expense:  To  this 
heading  should  be  charged  Executive  Salaries, 
Office  Help,  Messengers'  Salaries,  Telephone 
and  Telegraph,  Donations,  Dues,  and  all  other 
items  of  expense  where  they  do  not  amount  to 
enough  to  justify  a  separate  account.  Rent 
(which  item  is  usually  paid  in  one  monthly 
amount  and  is  easy  to  locate  when  the  amount 
is  wanted  for  any  purpose)  or  other  of  the 
headings  coming  under  General  Expense  can 
be  carried  in  the  Office  Expense  account  if 
desired. 

Insurance  and  Taxes:  The  title  itself  ex- 
plains the  amounts  to  be  charged  to  this  ac- 
count. 


□ 


For    Printing    Concerns  45 


Advertising  and  Selling:  To  this  account 
should  be  charged  all  dead-head  jobs  at  cost, 
all  jobs  gotten  out  to  advertise  the  shop  at  cost, 
all  amounts  paid  for  advertising,  postage  on 
advertising,  solicitor's  salaries,  etc.  When 
dead-head  or  advertising  jobs  are  gotten  out, 
a  job  record  should  be  made  out  for  them 
just  the  same  as  for  all  other  work,  with 
^'advertising"  in  the  space  for  customer's  name, 
and  posted  to  this  account  in  the  usual  manner 
when  completed. 

Commissions:  Where  part  of  the  business 
is  secured  by  salesmen  working  on  commission, 
this  account  should  be  kept  separate  from  ad- 
vertising and  selling.  The  last  two  items  are 
a  general  expense  on  the  total  sales,  while  com- 
missions are  chargeable  only  to  the  sales  upon 
which  they  are  paid.  Each  job  on  which  a 
commission  has  been  paid  should  have  that 
commission  included  among  the  items  entering 
into  the  cost  of  the  job,  which  must  be  covered 
before  a  profit  is  made. 

Stationery  and  Postage:  This  account 
should  be  charged  at  cost  with  all  jobs  printed 
for  office  use,  postage  on  bills  and  letters,  etc. 

Hauling  and  Carfare:  This  account  to  be 
charged  with  all  carfare  paid  out,  and  hauling 


0J 


46         An    Accounting    System 


for  delivering  goods.  Hauling  on  purchases  of 
ink  or  paper  should  be  charged  to  the  Ink  or 
Merchandise  Accounts. 

Heat  and  Water:  The  title  is  self-explana- 
tory. 

Power  and  Light:  The  title  is  self-explana- 
tory. 

Rent:  If  the  building  is  owned,  the  item  of 
rent  for  determining  cost  should  be  figured  as 
follows:  6%  on  amount  of  investment,  build- 
ing repairs,  taxes,  insurance,  and  depreciation. 
In  figuring  costs  this  expense  is  apportioned  to 
the  various  departments,  and  to  stock  storage 
according  to  the  square  feet  of  floor  space  oc- 
cupied. 

Spoiled  Work:  An  account  by  all  means 
should  be  kept  with  this  item,  and  to  it  charged 
at  cost  all  reprinting  work,  stock  cut  wrong, 
extra  presswork  on  account  of  pull-outs,  etc. 
Job  records  should  be  made  out  entitled 
"Spoiled  Work"  every  time  a  job  is  re-run  and 
these  job  records  posted  to  this  account  just 
the  same  as  other  job  records  are  posted. 

Close  of  the  Month's  Business: 

We  will  now  suppose  we  have  posted  all  the 
entries    for    the    month's    business — the    job 


For    Printing    Concerns  47 


tracers,  the  sales  book,  the  cash  book,  the 
journal,  the  two  loose-leaf  forms  "Monthly 
Summary  of  Business"  and  the  "Monthly  Dis- 
tribution of  Current  Bills.''  At  the  beginning 
of  the  year's  business  the  books  would  show  on 
the  debit  side,  the  inventories  of  the  investment 
in  the  several  investment  accounts,  accounts 
receivable  and  cash  on  hand,  these  amounts 
balanced  on  the  credit  side  by  Capital  Stock, 
Undivided  Profits  and  Accounts  Payable. 

We  will  now  give  a  summary  of  the  month's 
entries: 

Job  Records,  Summary  of  Business  and 
Sales  Book:  Debits  to  the  customer's  ac- 
counts, or  amounts  owing  us,  balanced  by 
credits  for  goods  sold,  work  done,  and  profits 
earned. 

Cash  Book:  Cash  received,  balanced  by 
credits  to  the  accounts  of  customers  from 
whom  received.  Cash  paid  out,  balanced  by 
debits  to  the  accounts  of  firms  to  whom  paid, 
or  charges  to  the  expense  accounts  for  which 
the  money  was  paid  out. 

Monthly    Distribution    of    Current    Bills: 

Debits  to  the  Merchandise,  Expense,  and  In- 
vestment accounts  for  goods  purchased,  bal- 
anced by  credits  to  accounts  of  firms  from 
whom  bought,  for  amounts  owed. 


15 


48  An    Accounting    System 


The  Journal:  Various  entries  not  coming 
under  any  of  the  classifications  above,  each 
entry  carrying  its  own  debit  and  credit,  which 
balance.  So  each  entry  or  set  of  entries  has 
been  balanced  by  an  entry  or  entries  on  the 
other  side  of  the  ledger  and  if  there  have  been 
no  mistakes  the  total  of  all  the  debit  and  credit 
amounts  in  the  ledger  should  be  the  same.  This 
should  be  proved  as  soon  as  possible  after  the 
close  of  the  month's  business  by  the 

Trial  Balance:  This  is  a  list  of  the  footings 
of  all  the  accounts  in  the  ledger.  When  added 
up  the  grand  totals  of  the  debit  and  credit  col- 
umns should  be  the  same.  For  the  sake  of 
brevity,  the  Accounts  Receivable,  Accounts 
Payable  and  Department  Expense  Accounts 
are  listed  on  a  separate  sheet  and  only  the  totals 
put  in  the  Trial  Balance.  I  have  heard  of  book- 
keepers whose  books  always  balanced  to  a  cent 
the  first  time,  but  will  say  that,  if  mine  did  so,  it 
would  be  so  contrary  to  experience  that  I  would 
look  for  an  error  on  the  debit  side  that  was  just 
equaled  by  another  on  the  credit  side.  In  this 
connection,  contrary  to  some  instances,  the 
larger  the  error,  the  better.  Thus,  if  the  differ- 
ence between  the  two  sides  is  $1,000.00  it  can 
be  located  at  a  glance,  while  one  of  10  cents 
may  not  be  revealed  until  every  bit  of  posting 
and  addition  for  a  whole  month's  business  has 
been  checked  over. 


$804  60 

37  95 

2,043  37 

35  62 

357  66 

17,404  43 

20,000  00 

For    Printing    Concerns  49 


TRIAL  BALANCE  FOR  JANUARY,  1913. 

Cash '. $1,136  32 

Merchandise  6,718  46 

Ink 406  12 

Printing  585  57 

Pay  Roll 749  60 

Interest  and  Discount 12  50 

Loss  and  Gain 

Undivided  Profits 1,900  00 

Capital  Stock 

General  Expense: 

Office  Expense 436  25 

Insurance  and  Taxes 391  45 

Advertising  and  Selling 106  18 

Stationery  and  Postage 30  70 

Hauling  and  Carfare 22  80 

Heat  and  Water 71  99              15  60 

Light  and  Power 28  60 

Spoiled  Work 5  25 

Stock  Handling 4  60 

Department  Expense 46  35 

Investment : 

Bindery  A 2,804  85 

Bindery  B 1,898  89 

Bindery  C 300  00 

Comp.  Room— Type,  etc 3,375  75 

Comp.  Machine 3,063  65 

Comp.  Machine— Metal 144  78 

Electrotypes 42  04 

Office 385  75 

Pressroom — Cylinder 5,097  97 

Pressroom — Platen 753  57 

Real  Estate 8,809  92 

Stock  Room 200  00 

Accounts  and  Bills  Receivable 3,682  61              75  25 

Accounts  and  Bills  Payable 42  50         2,480  54 


15 


$43,255  02      $43,255  £i2 


ET 


50  An    Accounting    System 


Most  book-keepers  have  their  own  ways  of 
checking  for  Trial  Balance  errors,  but  we  will 
enumerate  a  few  methods  a  little  different  from 
the  ordinary  which  are  especially  applicable  to 
this  system  of  book-keeping.  When  all  ordi- 
nary methods  of  finding  trial 'balance  errors 
have  failed,  it  comes  down  to  a  question  of 
checking  the  posting. 

It  is  not  impossible  that  a  job  record  be 
posted  to  a  customer's  account  and  not  to  the 
"Monthly  Summary  of  Business,''  or  posted 
for  one  amount  to  the  customer's  account  and 
another  to  the  summary  sheet.  For  this  rea- 
son, in  checking  this  blank,  it  is  advisable  not 
to  check  from  the  job  records  at  all,  but  to  pro- 
ceed as  follows:  Take  the  accounts  in  the 
ledger  to  which  the  job  tracers  have  been  post- 
ed— Advertising,  Stationery,  Spoiled  Work 
and  Accounts  Receivable;  begin  at  the  begin- 
ning, and  check  each  job  as  you  come  to  it  by 
the  price  for  that  job  number  on  the  summary 
blank.  Thus,  if  the  first  item  found  is,  we  will 
say,  in  the  Advertising  Acoount,  7207 — $8.36, 
we  will  turn  to  the  list  of  numbers  on  the  sum- 
mary sheet  and  when  we  come  to  7207,  place 
a  small  check  mark  by  the  total,  if  it  is  $8.36. 
After  the  ledger  has  been  gone  through  in  this 
manner,  run  down  the  list  of  numbers  and 
make  sure  that  every  one  has  been  checked,  for 
if  it  is  not  checked,  it  has  not  been  posted  to 


For    Printing    Concerns         51 


the  ledger.  When  you  have  done  this  you  may 
be  sure  that  the  posting  from  the  job  tracers 
and  summary  sheet  has  not  affected  your  trial 
balance,  for  any  errors  that  might  remain  could 
not  affect  the  result  provided  the  totals  of  the 
Profit,  Printing,  Ink  and  Merchandise  columns 
balance  the  total  of  the  last  colunm.  Once  in 
a  while  it  will  occur  that  there  is  a  mistake  in 
adding  the  total  column  of  the  Monthly  Sum- 
mary of  Business  which  is  balanced  by  a  mis- 
take of  equal  amount  either  in  addition  of  one 
of  the  other  columns,  or  by  the  items  from  a 
job  record  not  balancing.  For  this  reason  it 
is  advisable  to  check  the  addition  of  the  last  or 
total  column  carefully  even  though  the  foot- 
ings of  the  "Summary"  may  apparently  balance. 
In  the  monthly  Distribution  of  Current  Bills, 
the  same  principles  as  stated  above  apply;  that 
if  the  addition  of  the  total  column  is  correct 
and  the  sum  of  the  other  columns  balances  it, 
there  are  not  any  mistakes  in  it  that  can  affect 
the  trial  balance.  The  best  way  is  to  keep  a 
Hst  of  errors  made  in  the  past  for  guidance  in 
searching  for  errors  in  the  future. 

The  Yearly  Balance  Sheet:  Annually,  or 
semi-annually  comes  the  casting  up  of  results 
for  the  year,  the  figuring  of  profits  or  losses 
and  the  closing  of  the  books  for  a  fresh  start 
on  the  next  years  business.    In  making  a  bal- 


15 


52  An    Accounting    System 


ance  sheet  we  start  first  with  the  trial  balance. 
The  next  column  filled  in  is  the  Inventories. 
For  the  Merchandise  Inventory,  a  complete  list 
should  be  made  of  all  the  paper  stock  on  hand 
and  stock  for  all  jobs  not  completed  on  Jan.  1st 
and  the  value  figured  out  at  cost,  not  selling 
price.  This  total  is  filled  in  in  the  inventory 
column  opposite  Merchandise.  Next  the  ink 
on  hand  should  be  inventoried  in  the  same  man- 
ner and  total  put  down  opposite  ink. 

For  the  Printing  inventory,  use  a  sheet  with 
a  heading  for  each  department.  Take  the  live 
order  binder  on  Jan.  1st  (after  Dec.  31st  time 
tickets  have  been  posted  and  all  sheets  removed 
for  Dec.  31st  deliveries)  and  foot  up  the  time 
on  each  job  record,  putting  down  the  job  num- 
ber, and  the  total  time  for  each  department  on 
the  blank  sheet,  until  all  the  job  records  have 
been  listed.  The  total  time  of  all  the  unfinished 
orders  in  each  department,  multiplied  by  the 
rate  per  hour  for  that  department  will  give  the 
value  of  work  in  process  and  the  total  of  all 
departments  will  give  the  "Printing"  inven- 
tory. 

The  Pay  Roll  inventory  should  show,  on  the 
credit  side,  all  wages  due  at  close  of  business 
on  Dec.  31st. 

There  are  no  inventories  for  Interest  and 
Discount,  Loss  and  Gain,  Undivided  Profits, 
Capital  Stock  or  Department  Expense. 


m 

For    Printing    Concerns  53  ■— • 


Inventories  of  Investment  Accounts :  These 
should  show  the  value  of  the  type,  machinery 
and  equipment,  less  depreciation.  Here  a  few 
words  on  the  subject  of  depreciation  would  not 
come  amiss,  as  many  printers  regard  this  as  a 
vague  item  that  is  supposed  to  be  deducted 
from  their  profits,  varying  in  amount  according 
to  whether  the  profits  would  cover  a  large  or 
small  amount,  and  never  figuring  in  the  books 
at  all.  The  fact  is,  depreciation  is  not  some- 
thing that  should  be  deducted  from  the  profits, 
but  it  is  an  expense  that  must  be  taken  care  of 
before  there  are  any  profits.  As  this  item  does 
not  represent  any  actual  cash  paid  out,  it  is 
likely  to  be  felt  lightly  in  the  first  few  years 
when  the  equipment  is  new,  but  if  disregarded, 
becomes  a  heavy  burden  as  the  equipment  be- 
comes worn  out.  As  a  matter  of  fact  this  is 
one  of  the  surest  items  of  expense.  Other  ex- 
penses may  be  curtailed,  or  in  some  instances 
avoided,  but  some  day  every  machine  in  your 
plant  will  go  to  the  junk  heap.  It  is  as  sure 
as  death  and  taxes.  As  an  instance,  can  recall 
a  local  firm,  who  were  rated  in  Bradstreet's  a 
couple  of  years  back  at  $75,000,  first  grade  of 
credit.  Their  equipment  probably  cost  that 
much  or  more  and  was  no  doubt  carried  on 
their  books  at  about  $100,000,  but  it  was  old 
and  worn  out  and  when  this  concern  went  into 
bankruptcy    recently,    the    whole    plant  .  only 


SJ 


54  An    Accounting    System 


brought  $13,000  at  Receiver's  sale.  A  safe  and 
wise  plan  is,  when  the  plant  is  new,  if  the  item 
of  depreciation  at  the  end  of  the  year's  business 
is  larger  than  the  amount  that  has  been  in- 
vested during  the  year  in  new  equipment,  to 
put  the  surplus  into  Interest-bearing  Gold 
Bonds,  thus  providing  a  fund  that  is  available 
when  new  equipment  is  needed. 

Now,  as  to  the  amount,  the  American  Print- 
ers' Cost  Commission  has  decided  on  10%  of 
first  Cost  annually  which  seems  to  be  a  safe 
rule,  while,  though  instances  can  be  pointed 
out  of  machines  that  are  giving  good  and  prof- 
itable service  at  the  end  of  fifteen  or  twenty 
years,  they  are  rare  in  the  busy  up-to-date  shop, 
and  there  are  many  more  instances  where  ma- 
chines are  run  five  to  eight  years  and  then 
traded  in  for  something  newer  or  more  up-to- 
date  at  half  their  first  cost  or  less.  In  a  recent 
statement  of  cost  of  operation,  the  Mergen- 
thaler  Linotype  Co.  figure  depreciation  at  5% ; 
placing  the  life  of  the  machine  at  twenty  years, 
but  long  before  that  time  there  would  be  noth- 
ing left  of  the  original  machine  but  the  frame, 
and  some  parts  would  have  been  replaced  sev- 
eral times. 

So,  to  be  on  the  safe  side,  deduct  10%  of  the 
first  cost  in  figuring  these  Investment  inven- 
tories, and  25%  on  type. 

Ten  per  cent,  of  the  first  cost  does  not  mean 


□ 


For    Printing    Concerns  65 


10%  of  inventory.  For  instance,  if  a  press  is 
bought  for  $2,500.00,  $250.00  is  deducted  for 
depreciation  the  first  year,  leaving  it  standing 
on  the  books  at  $2,250.00.  If,  for  the  second 
year,  10%  was  taken  off  this  amount  instead 
of  the  first  cost,  the  depreciation  would  be  only 
$225.00,  next  year  only  $202.50,  and  so  on,  and 
the  amount  never  would  be  entirely  charged 
off.  The  right  way  is  to  deduct  10%  of  first 
cost  ($250.00)  each  year  so  that  after  ten  years, 
if  the  press  is  still  in  use,  whatever  it  is  worth 
will  be  clear  profit.  Look  up  the  Cylinder 
Pressroom  investment  account  on  page  43. 
The  total  is  $7,882.97.  Ten  per  cent,  of  this 
would  be  $788.30.  But  this  account  represents 
machinery  which  cost  $14,550.00,  and  the  de- 
preciation is  $1,455.00.     See  page  65. 

There  should  be  no  inventories  for  any  of 
the  Expense  accounts  unless  possibly  it  might 
be  Insurance  and  Taxes.  If  the  insurance  pol- 
icies are  all  straight  one-year  contracts,  the 
whole  amount  should  be  charged  off  at  the  end 
of  the  year.  However,  if  some  of  them  run  for 
five  years  (as  is  often  the  case  with  policies  on 
a  building),  it  would  not  be  right  to  charge  the 
whole  five  years'  premium  off  as  it  would  be 
too  heavy  a  burdei>  on  one  year's  business.  So, 
in  this  event,  the  value  of  the  unearned  premi- 
um should  be  figured  out  and  put  down  for  the 
insurance  inventory. 


0[ 


56  An    Accounting    System 


The  next  step  is  the  filHng  in  of  the  Loss 
and  Gain  column.  The  credit  side  of  the  Mer- 
chandise account  represents  the  amount  of  the 
total  sales  for  the  year.  To  this  should  be 
added  the  inventory  representing  the  value  of 
the  stock  on  hand  and  from  the  sum  subtract 
the  total  of  the  debit  side,  representing  the 
amount  paid  for  stock.  The  difference  is  the 
profit  on  stock,  which  should  be  put  down  in 
the  gain  column.  If  the  debit  side  is  larger, 
the  difference  should  be  put  down  in  the  loss 
column.  In  figuring  the  cost  of  stock  on  job 
records,  a  percentage  is  added  to  cover  cost  of 
handling  and  stacking,  interest,  taxes  and  in- 
surance on  stock,  and  rent  of  space  used.  So 
that,  while  the  Merchandise  account  may  show 
a  gain,  it  usually  is  just  about  enough  to  offset 
these  items. 

The  profit  or  loss  on  ink  should  be  figured 
up  in  just  the  same  manner  as  explained  above 
for  Merchandise  and  the  amount  entered  in  the 
Loss  or  Gain  column. 

The  printing  amount  should  be  carried  to 
the  "Gain"  side  of  the  Loss  and  Gain  column ; 
this  amount,  if  all  job  records  have  been 
figured  correctly,  should  be  enough  to  offset 
the  amounts  of  Pay  Roll,  Department  Ex- 
pense, General  Expense  and  Depreciation. 

To  the  Pay  Roll  amount  should  be  added 
the  inventory  representing  wages  due  on  De- 


For    Printing    Concerns  57 


cember  31st,  and  the  sum  carried  to  the  "Loss" 
column.  The  Interest  and  Discount  should  be 
balanced  and  the  balance  carried  to  the  "Loss" 
or  "Gain"  column,  according  to  whether  the 
debit  or  credit  sides  are  larger.  The  Loss  and 
Gain  account  should  be  balanced  and  the  bal- 
ance carried  to  the  "Gain"  column  (we  certain- 
ly hope  it  will  not  have  to  be  carried  to  the 
"Loss"  column). 

"Undivided  Profits,"  "Capital  Stock"  and 
"Cash"  do  not  figure  in  the  Loss  and  Gain  col- 
umn at  all. 

Department  Expense,  which  is  listed  in  one 
amount,  though  kept  in  separate  accounts  for 
each  department  in  the  ledger,  should  be  car- 
ried to  the  Loss  column. 

In  the  Investment  accounts  the  Inventory 
should  be  subtracted  from  the  total,  which 
represents  the  inventory  at  the  beginning  of 
the  year  plus  the  amounts  purchased  during 
the  year,  and  difference,  representing  the  de- 
preciation, should  be  placed  in  the  Loss  column. 

The  accounts  coming  under  the  heading 
"General  Expense"  should  be  entered  on  the 
Loss  side.  When  all  of  these  balances  have 
been  carried  to  the  right  column,  the  two  col- 
umns should  be  totaled  and  the  difference 
found.  This  (if  a  profit)  is  to  be  entered  in 
red  ink  on  the  Loss  side,  and  the  column  ruled 
off  and  footed.    However,  for  the  present,  it  is 


m 


BALANCE  SHEET 


Ledger  Accounts 


Cash 

Merchandise 

Ink 

Printing 

Pay  Roll 

Interest  and  Discount  .... 

Loss  and  Gain 

Undivided  Profits 

Capital  Stock 

General  Expense : 

Office  Expense 

Insurance  and  Taxes .... 

Advertising  and  Selling . 

Stationery  and  Postage , . 

Hauling  and  Car  Fare . . . 

Heat  and  Water 

Light  and  Power 

Spoiled  Work 

Stock  Handling  

Department  Expense 

Investment : 

Bindery  A 

Bindery  B 

Bindery  C 

Comp.  Room — Type,  etc. 

Comp.  Machine 

Comp.  Machine — Metal . 

Electrotypes 

Office 

Pressroom— Cylinder. . .'. 

Pressroom  —Platen  .     .    . 

Real  Estate 

Stock  Room 

Acc'ts  and  Bills  Receivable 
Acc'ts  and  Bills  Payable  . . 


Trial  Balance 


3.235  79 
17.238  76 

905  41 

9  53 

9.085  25 

81  82 

99  62 

1,900  00 


5.475  15 
1,353  86 
651  05 
262  56 
234  25 
201  37 
387  50 
118  87 
68  25 
67893 

3.093  61 
1,965  29 

300  00 
3.855  30 
3.064  30 

337  20 

118  II 

499  09 
7,882  97 

796  32 
8,844  05 

242  60 
3.878  62 

699  61 


12,214  35 
591  50 

20,954  08 

427  52 

3.981  77 

17,404  43 

20,000  00 

91  40 


75 
52  69 

9  00 

6  90 

5  00 
12  00 

16  00 
27  9^ 


177  02 
1.592  65 


77.565  04 


Firm 'si  Net  Gain 


77,565  04 


Inventory 


5.518  08 
315  35 
692  53 


345  20 


2.608  61 
1,713  29 

270  oc 
3.339  30 

2.609  30 
275  50 
106  30 

449  09 
6,727  97 

681  32 
8,544  05 

218  34 


Decembbr  3i»  1913- 

Loss  and  Gain 

Net  Capital 

Resources  and  Liabilities 

3,235  79 

493  67 

5,518  08 

I  44 

315  35 

21,637  08 

692  53 

9.085  25 

345  70 

3,882  15 

15,504  43 
20,000  00 

5,383  75 

1,008  66 

345  20 

651  05 

262  56 

233  50 

148  68 

387  50 

109  87 

68  25 

672  03 

480  00 

2,608  61 

240  00 

1.713  29 

30  00 

270  00 

500  00 

3.339  30 

455  00 

2,609  30 

33  72 

275  50 

II  81 

106  30 

50  00 

449  09 

1,155  00 

6,727  97 

115  00 

681  32 

300  00 

8,544  05 

24  26 

218  34 
3,701  60 

89304 

4,954  15 

40,458  58 

4.954  15 

26,360  04 

26,360  04 

Net  Caj 

» ital 

40,458  58 

40,458  58 

40,458  58 

41,351  62 

41.351  62 

□ 


60         An    Accounting    System 


best  that  the  final  putting  down  of  the  balance 
and  ruling  off  be  left  until  the  last  column  has 
been  filled  out,  as,  if  there  is  any  mistake,  the 
last  column  will  not  balance  and  the  work  will 
have  to  be  checked  over  to  find  the  error.  The 
amount  of  the  gain  should  be  carried,  in  black 
ink,  to  the  credit  side  of  the  column  entitled 
"Net  Capital,"  as  the  firm  should  be  that  much 
better  off  than  they  were  at  the  beginning  of 
the  year.  The  "Capital  Stock"  and  Undivided 
Profits  accounts  should  be  carried  to  the  credit 
side  under  the  Net  Capital  heading  and  the 
total  of  the  three  amounts  should  show  just 
what  the  firm  is  worth.  The  balancing  of  this 
column  with  red  ink  and  ruling  it  off  should 
also  be  postponed  until  the  work  has  been 
proved. 

The  next  column,  entitled  "Resources  and 
Liabilities,"  is  intended  to  show,  item  by  item, 
just  what  goes  to  make  up  the  Net  Capital,  as 
shown  in  the  preceding  column.  The  inven- 
tories of  Merchandise,  Ink  and  Printing  are 
resources  and  should  appear  in  the  Resource 
column.  The  inventory  of  the  Pay  Roll  ac- 
count shows  wages  due,  which  is  a  liability,  so 
that  amount  goes  in  the  Liability  column.  In 
the  balance  sheet  illustrated,  no  wages  were 
due,  so  this  item  does  not  appear.  Interest  and 
Discount  and  the  Loss  and  Gain  account  have 
been  closed  into  the  Loss  and  Gain  column,  so 


□ 


For    Printing    Concerns         61 


they  go  no  further.  Undivided  Profits  and 
Capital  Stock  also  do  not  appear  in  the  Re- 
sources and  Liabihties  columns,  as  they  have 
been  closed  into  the  Net  Capital  column.  Next 
we  have  Cash,  the  best  of  all  Resources,  for, 
if  the  business  should  be  wound  up,  the  ma- 
chinery and  stock  might  be  hard  to  dispose  of, 
the  accounts  receivable  slow  to  collect,  but  the 
cash  is  always  available  at  full  face  value. 

The  Inventories  of  the  Investment  accounts 
are  all  resources.  The  Expense  accounts  do 
not  appear  in  these  columns  at  all,  unless  the 
insurance  account  should  have  an  inventory, 
as  previously  explained,  in  which  case  it  should 
be  carried  to  the  Resource  column.  The  differ- 
ence between  the  two  totals  of  Accounts  Re- 
ceivable is  a  resource  and  the  Accounts  Pay- 
able a  liability.  Now  comes  the  "proof  of  the 
pudding."  If  all  the  work  has  been  done  cor- 
rectly, the  "Net  Capital"  amount  carried  to  the 
Liability  column  should  make  the  two  columns 
balance.  If  it  does  not  do  so,  you  will  have  to 
hunt  the  mistake.  Check  the  carrying  across 
of  each  amount,  see  that  no  mistakes  have  been 
made  in  addition  and  subtraction  in  figuring 
losses  and  gains,  that  you  have  not  neglected 
to  carry  an  amount  to  the  last  column,  and  that 
no  amount  is  put  on  the  wrong  side  of  the  Loss 
and  Gain  column.  When  the  Net  Capital 
makes  the  Resources  and  Liabilities  column 


Bf 


62         An    Accounting    System 


balance,  the  balance  sheet  is  complete.  The 
Loss  and  Gain  column  should  have  the  amount 
of  the  gain  filled  in  in  red  ink,  entitled  the 
"Firm^s  net  gain"  and  the  column  should  be 
ruled  off  and  footings  put  down. 

The  putting  down  of  an  amount  in  red  ink 
is  intended  to  show  that  the  total  of  the  other 
column  is  just  that  much  more  than  the  total 
of  the  one  in  which  the  red  ink  entry  appears 
and  that  the  amount  really  belongs  on  the  other 
side;  and  so  when  the  amount  of  the  red  ink 
entry  (or  balance)  is  carried  forward  in  black 
ink,  it  is  naturally  put  on  the  side  where  it  be- 
longs. So  the  amount  of  the  net  gain  is  carried 
forward  to  the  Net  Capital  column  in  black  ink 
on  the  credit  side.  Then  the  amount  of  the 
Net  Capital  column  is  filled  in  in  red  ink,  and 
carried  to  the  Liability  column  in  black  ink,  the 
four  last  columns  ruled  off  and  footed  and  the 
balance  sheet  is  complete. 

Analysis  of  Results:  The  balance  sheet 
shows  in  concise  form  the  expenses  for  the 
year,  the  results  of  the  year's  business  and  just 
where  the  firm  stands  at  the  beginning  of  the 
New  Year.  The  Net  Capital  Column  shows 
what  the  firm  is  worth  and  the  Resources  and 
Liabilities  column  shows  just  what  this  total 
is  represented  by. 

The  sales  of  Printing,  exclusive  of  Paper 


For    Printing    Concerns  63 


Stock,  etc.,  were  $21,637.08.  What  was  the 
cost  of  this  item?  What  was  the  net  profit  on 
stock?  What  relation  does  the  Pay  Roll  bear 
to  the  other  expenses? 

These  questions  can  be  answered  by  taking 
a  pencil  and  paper  and  jotting  down  the  items 
that  belong  to  each  account,  as  shown  on  pages 
68  and  69. 

Thus  we  see  that  the  Profit  on  Merchandise 
of  $493.67  dwindles  to  $120.71  when  Stock 
Handling,  Insurance,  Taxes,  etc.,  are  charged 
to  this  account,  and  when  we  would  deduct 
Building  depreciation  and  Interest  for  the  floor 
space  occupied  by  stock,  even  this  would  dis- 
appear. In  the  Printing  account,  the  cost,  in- 
cluding all  expenses,  is  $21,042.46,  of  which 
amount  the  Pay  Roll  is  $9,085.25,  or  less  than 
half. 

The  Business  is  worth  $40,458.58,  of  which 
$3,235.79  is  in  cash,  $2,808.56  is  balance  of 
accounts  receivable  over  accounts  payable, 
$6,525.96  in  merchandise,  ink  and  unfinished 
work,  $8,544.05  in  real  estate,  and  $18,999.02 
in  machinery,  type  and  other  equipment.  As 
the  last  item  represents  a  first  cost  of  $30,- 
947.90,  it  ought  to  be  conservative,  and  the 
business  ought  to  bring  that  much  or  more  as 
a  going  concern. 

Closing  of  Accounts:    The  next  step  is  the 


0J 


64 


An    Accounting    System 


closing  of  the  accounts  in  the  Ledger  in  accord- 
ance with  the  results  of  the  balance  sheet  so 
as  to  start  the  new  year  with  a  clean  slate. 
Taking  the  Merchandise  account  first,  the 
amount  of  the  inventory  should  be  put  down 
on  the  credit  side  in  red  ink.  If  this  makes  the 
credit  side  largest  (as  it  does  in  the  example 
shown),  the  account  shows  a  gain.  This 
amount  is  put  down  on  the  debit  side  in  red 
ink,  and  the  account  ruled  off  and  footed.  Now, 
as  we  have  explained  before,  the  putting  down 
of  an  amount  in  red  ink  shows  that  the  other 
side  of  the  account  is  larger  and  the  books  will 
not  balance  unless  this  amount  is  carried  for- 
ward in  black  ink  on  the  side  of  the  ledger 
where  it  belongs.  So,  after  ruling  the  account 
off,  the  inventory  is  put  down  in  black  ink  on 
the  debit  side,  while  the  profit  is  carried  to  the 
Loss  and  Gain  account  in  black  ink  on  the 
credit  side. 


1913                                              MERCHANDISE 

Dec. 

31 
31 

Am't  forward 
Loss  and  Gain 

Inventory 

17,238  76 

493  67 

Dec. 

31 
31 

Am't  forward 
Inventory 

ia.214  35 

5,518  oS 

17.732  43 

17,732  43 

1914 
Jan. 

I 

.5,518  08 

For    Printing    Concerns 


05 


IB 


Now  the  account  is  ready  for  the  entries  for 
the  next  year. 

The  Ink  account  is  closed  with  two  entries — 
one  for  Inventory  and  one  for  Loss  and  Gain, 
just  as  shown  above.  Printing  is  also  closed  in 
the  same  manner.  In  the  balance  sheet  shown, 
Pay  Roll  is  closed  with  only  one  entry — the 
Loss  and  Gain  entry;  but  in  case  this  account 
has  an  inventory,  it  should  appear  in  red  ink 
on  the  debit  side  and  in  black  ink  on  the  credit 
side  after  the  account  has  been  ruled  off.  In- 
terest and  Discount  is  closed  by  only  one  en- 
try— the  loss  and  Gain  entry,  and  is  ruled  off 
and  no  balance  brought  down.  The  closing 
of  the  Loss  and  Gain  and  Undivided  Profits 
accounts  is  the  very  last  step,  and  will  be  ex- 
plained later. 

The  Department  Expense  accounts  are 
closed  by  a  Loss  and  Gain  entry,  and  all  are 
ruled  off  clear. 

The  Investment  accounts  are  closed  with 


CYLINDER  PRESSROOM 
1913                                                                            Inveiiment 

Jan. 
Feb. 

I 
5 
5 

Inventory 
Michlie,  26  x  40 
Motor,  3  h.  p. 

Inventory 

5.091  77 

2,650  00 

135  00 

Dec. 

31 
31 

Inventory 
Depreciation 

6,427  97 
1.455  00 

7,882  97 

7.882  97 

1914 
Jan. 

I 

1 

6,427  97 

If 


66         An    Accounting    System 


two  entries,  both  on  the  credit  side,  as  shown 
on  pp.  65.  As  the  Loss  and  Gain  entry  repre- 
sents depreciation,  it  is  permissible  to  use  that 
term,  instead  of  Loss  and  Gain.  Also,  if  desired, 
in  order  to  save  space  and  extra  entries  in  the 
Loss  and  Gain  account,  these  amounts  repre- 
senting depreciation  may  be  brought  forward 
in  one  amount,  entitled  "Depreciation." 

Closing  of  Loss  and  Gain  account :  As  each 
account  has  been  ruled  off,  the  Loss  and  Gain 
entry  should  have  been  carried  to  the  Loss  and 
Gain  account  in  black  ink  on  the  opposite  side 
of  the  ledger  from  where  it  appears  in  red  ink 
in  the  account.  When  the  two  columns  are 
footed  up,  the  balance  should  be  the  same  as 
that  shown  by  the  Loss  and  Gain  column  in 


I9I3 

LOSS  AND  GAIN 

Dec. 

31 

Amt.  forward 

99  62 

Dec. 

31 

Am't  forward 

3.981  77 

31 

Pay  Roll 

9.085  25 

31 

Ink 

I  44 

31 

Office  &  Gen.  Exp. 

5,383  75 

31 

Int.andEisct, 

345  70 

31 

Ins.  and  Taxes 

1,008  66 

31 

Merchandise 

493  67 

31 

Adv.  and  Selling 

651  05 

31 

Printing 

21,637  08 

31 

Stat'y  and  Postage 

262  56 

31 

Hauling  and  Carfr. 

233  50 

31 
31 
31 
31 
31 
31 

^^ 

1 

Heat  and  Water 
Light  and  Power 
Spoiled  Work 
Stock  Handling 
Dept.  Expense 
Depreciation 

Undivided  Profits 

148  68 

387  50 

109  87 

68  25 

672  03 

3.394  79 

4,954  15 

26,459  66 

26,459  66 

For    Printing    Concerns         67 


the  balance  sheet,  in  this  case  $4,954.15.  This 
should  be  put  down  on  the  debit  side  in  red  ink 
and  the  account  ruled  off. 

Another  Method  of  Closing  Loss  and  Gain: 

This  consists  in  dividing  the  Loss  and  Gain 
entries  from  the  expense  accounts  between  the 
Merchandise,  Printing,  and  Loss  and  Gain  ac- 
counts, so  that  the  Merchandise  and  Printing 
accounts  will  show  net  results  on  these  items 
instead  of  the  gross  amounts  being  carried  to 
Loss  and  Gain  and  one  general  result  being 
struck  off  there. 

To  the  Merchandise  account  will  be  carried 
the  amount  "Stock  Handling  and  Storage." 
This  is  shown  on  the  balance  sheet  as  a  sepa- 
rate account,  but  these  entries  could  be  just 
as  well  charged  direct  to  the  Merchandise  ac- 
count where  they  amount  to  so  little.  Now 
the  amount  "Taxes  and  Insurance"  will  have 
to  be  separated  and  part  of  it  carried  to  the 
Merchandise  and  part  to  the  Printing  account. 
The  Merchandise  account  should  be  charged 
with  the  direct  taxes  and  insurance  paid  on 
stock.  Also,  as  in  this  case  the  building  is 
owned,  part  of  the  taxes  and  insurance  are 
on  the  building  and  the  Merchandise  account 
should  bear  its  proportion  according  to  the 
floor  space  used  for  stock  storage.  This  ac- 
count would  be  divided  as  shown  on  the  next 
page. 


II 


El 


68         An    Accounting    System 


1913 


INSURANCE  AND  TAXES. 


Dec. 


31 


1914 
Jan. 


Am't  forward 


Inventory 


i»353  86 

Dec. 

31 
31 
31 

i»353  86 

345  20 

Inventory 

Merchandise 

Printing 


345  20 
280  45 
728  21 


1,353  86 


The   Merchandise  account  would  then  be 
closed  as  follows : 


1913 


MERCHANDISE 


Dec. 


1914 
Jan. 


Am't  forward 
Ins.  and  Taxes 
Stock  Handling 
Depreciation 
Loss  and  Gain 


Inventory 


X.7238  76 

Dec. 

31 

280  45 

31 

68  25 

24  26 

I20  71 

17.732  43 

5,518  08 

Am't  forward 
Inventory 


12.214  35 
5,518  08 


17,732  43 


Next    the    Printing   account   is    closed    by 
bringing  to  it  the  proper  amounts  as  follows: 


For    Printing    Concern 


69 


1913 

PRINTING 

Dec. 

^i 

Am't  forward 

9  53 

Dec. 

31 

Am't  forward 

20,954  08 

31 

Pay  Roll 

9.085  25 

31 

Inventory 

692  53 

31 

Office  &  Gen.  Exp. 

5.383  75 

31 

Ins.  and  Taxes 

728  21 

31 

Adv.  and  Selling 

651  05 

31 

Stafy  and  Postage| 

262  56 

31 

Hauling  and  c.  f. 

233  50: 

31 

Heat  and  Water 

148  68' 

31 

Light  and  Power 

38750 

31 

Spoiled  Work 

109  87 

3» 

Dept.  Expenses 

672  03 

31 

Depreciation 

3,370  53 

31 

I-,oss  and  Gain 

604  15 

1 
i 
t 
1 
i 

21.646  6r 

21,646  61 

1914 

1 

Jan. 

I 

Inventory 

692  53 

1 

1 

The  Loss  and  Gain  account  would  then  b; 
closed  as  follows : 


1913 


LOSS  AND  GAIN 


Dec. 


Am't  forward 
Undivided  Profits 


9962 

i  Dec. 

31 

4,954  15 

1 
1 

31 
31 
31 
31 

:  5.053  77 

r^ 

1 

Am't  forward 

Ink 

Int.  and  Disct. 

Merchandise 

Printing 


While  this  seems  a  more  roundabout  way 
of  achieving  the  same  result,  it  shows  the  direct 
net  result  in  the  principal  accounts  instead  of 


El 


70 


An    Accounting    System 


one  general  result  and  affords  a  basis  for  figur- 
ing costs. 

When  the  Loss  and  Gain  account  has  been 
ruled  off,  the  gain  should  be  carried  in  black 
ink  to  the  credit  side  of  the  Undivided  Profits 
account.  And  when  dividends  are  paid,  the 
cash  book  entry  should  be  posted  to  the  debit 
side  of  this  account. 


1913                                         UNDIVIDED  PROFITS 

Dec. 

31 

31 

Am't  forward 
Balance 

Dividend  No.  17 

1,900  00 
20,458  58 

Dec. 

31 
31 

Am't  forward 
Loss  and  Gain 

Balance 

17404  43 
4,954  15 

22.358  58 

22,358  58 

1914 
Jan. 

I 

•  3,000  00 

Jan. 

I 

20,458  58 

After  closing  the  books  it  is  a  good  idea  to 
take  a  trial  balance  again  to  make  sure  that 
all  accounts  have  been  ruled  off  and  correct 
balances  brought  down.  When  this  has  been 
done  we  are  ready  to  start  another  year's  busi- 
ness "  with  a  clean  slate.'' 

A  System  for  Keeping  Account  of  Stock: 
While  it  does  not  come  directly  under  the  head- 


For    Printing    Concerns         71 


ing  of  "Accounting/'  I  believe  a  brief  descrip- 
tion of  a  good  system  for  keeping  track  of  stock 
would  not  be  out  of  the  way.  After  trial  of 
books,  both  bound  and  loose-leaf,  the  card 
index  was  decided  upon  as  the  best.  The  cards 
are  kept  in  a  fire-proof  cabinet  so  as  to  be  avail- 
able as  an  inventory  in  case  of  fire.  The  card 
used  is  55^4  x  9,  and  has  the  columns  running 
the  long  way  of  the  card  while  the  description, 
etc.,  runs  the  other  way.  This  gives  a  long 
column  for  posting,  while  the  information  as 
to  kind,  size,  color,  location,  etc.,  are  where 
they  can  be  most  readily  seen  when  running 
through  the  file.  The  price,  and  from  whom 
bought  are  entered  when  the  card  is  first  made 
out ;  however,  if  some  grade  of  goods  may  be 
purchased  from  different  firms,  and  at  varying 
prices,  so  in  the  column  "from"  the  firm  name 
and  price  are  entered  on  subsequent  lots  if 
different  from  the  first.  The  spaces  marked 
location  are  filled  in,  the  first  space  with  W 
for  Warehouse  or  S  for  Stockroom,  while  each 
bin  is  numbered  and  each  shelf  is  numbered. 
Now  we  will  suppose  a  ream  of,  say  for  in- 
stance, colored  bond,  is  bought  for  a  certain 
job,  126  sheets  are  used  on  the  job  and  the 
balance  put  away.  In  eight  months  the  job 
comes  in  again,  the  regular  stockman  who 
knows  where  that  particular  kind  of  stock  is 
kept  is  away,  and  the  man  who  is  to  get  out 


□ 


BJ 


72         An    Accounting    System 


the  stock  doesn't  know  where  to  find  it.  He 
phones  into  the  office,  the  card  is  looked  up  and 
he  is  told  S-4-9 — meaning  Stockroom,  bin  4, 
shelf  9.  The  first  column  on  the  card  is  for  the 
stock  received,  the  second  for  stock  used,  and 
the  third  for  entering  balances  or  inventories. 

Posting  to  Stock  Cards:  When  a  bill  for 
stock  has  been  O.  K.'d,  it  is  entered  in  the  first 
column  and  the  bill  stamped  "Posted."  When 
the  job  ticket  is  made  out,  there  is  also  made 
out  a  slip  containing  an  order  for  the  stockman 
to  get  out  so  many  sheets  of  a  certain  size, 
weight,  color  and  grade  of  stock,  which  is  gotten 
out  and  held  until  proof  is  O.  K.'d,  when  it  is 
cut  according  to  instructions  on  the  job  ticket. 
After  the  job  is  completed,  and  the  ticket  re- 
turned to  the  office,  the  stock  that  has  been 
used  is  posted  in  the  second  column  of  the  stock 
card,  giving  date,  job  number  and  number  of 
sheets  used.  Theoretically,  the  stock  should 
be  charged  off  just  as  soon  as  the  ticket  is  made 
out,  but  in  practice  it  has  been  found  that, 
owing  to  many  changes  between  time  job 
ticket  is  made  out  and  proof  O.  K.'d,  due  to 
change  in  size,  quantity,  heavier  weight,  or 
different  quality  wanted,  or  grade  selected 
being  found  unsuitable,  the  best  plan  is  to  post 
the  stock  used  after  the  job  has  been  gotten 
out.    Also  the  stockman  should  be  given  strict 


RECEIVED 


QUANTITY 


USED 


JOB  NO.         QUANTITY 


w 

O 

a 

o 

H 

*^ 

r 

o 

•jj 

ptf 

u 


74         An    Accounting    System 


instructions  to  mark  any  such  changes  on  the 
ticket ;  also  any  extra  sheets  gotten  out  owing 
to  short  count,  spoilage  or  mistakes  in  cutting. 

We  keep  all  high-grade  stock,  such  as  writ- 
ing paper,  envelopes,  cards,  etc.,  locked  up; 
no  one  but  the  stockman  has  the  key  and  he 
is  held  responsible  for  it. 

On  the  card  shown,  the  amounts  of  the  two 
columns  are  footed  up  in  pencil  and  balanced 
when  it  is  desired  to  know  amount  on  hand. 
Some  favor  carrying  out  the  balance  each  time 
an  entry  is  made  and  this  can  be  done,  using 
the  form  shown  herewith,  but  do  not  think  it 
advisable.  The  plan  first  described  is  the  same 
method  that  is  used  in  book-keeping,  while 
the  totals  of  the  columns  will  make  it  easy  to 
tell  the  quantity  used  during  a  certain  period 
as  a  guide  to  placing  an  order.  The  second 
method  requires  much  more  time,  as  it  is  neces- 
sary to  make  a  subtraction  every  time  an  entry 
is  made,  with  endless  chances  for  errors  which 
would  be  hard  to  locate. 

For  scrap  or  cut  stock,  a  form  similar  to  the 
previous  one  is  used,  except  that  it  is  printed 
on  an  envelope  and  a  piece  of  the  stock  kept 
inside  for  comparison.  Also,  instead  of  "Size'' 
and  "Weight''  blanks,  as  shown,  it  has  blank 
spaces  for  size  and  original  size  and  weight, 
so  that  the  heading  when  filled  in  would  read 
as  follows :    Enamel  book,  white,  size  10  x  25, 


For    Printing    Concerns  75 


original  size  and  weight  25  x  38-80.  The  stock- 
cutter  is  instructed,  every  time  he  cuts  a  lot 
of  stock  which  leaves  a  usable  strip  of  waste, 
to  turn  in  a  sample  of  the  strip  to  the  office, 
marked  with  the  quantity  on  hand.  Then  one 
of  these  envelopes  is  filled  out ;  the  sample  put 
inside,  and  filed.  If  this  file  is  looked  at  every 
time  a  job  ticket  is  made  out  to  see  if  there 
isn't  something  which  can  be  used,  a  good 
many  dollars  can  be  saved  in  a  year.  For  in- 
stance, in  our  shop  we  haven't  cut  up  a  sheet 
of  cardboard  in  several  years  for  the  small  jobs 
of  tickets  that  come  in,  always  getting  them 
out  of  scrap. 

Guide  Cards:  These  stock  account  cards 
and  envelopes  will  require  guide  cards  so  that 
they  can  be  referred  to  quickly.  No  rule  can 
be  laid  down  for  indexing  them  as  the  stock 
varies  in  diflPerent  shops,  but  the  best  plan  is 
to  separate  the  cards  for  the  different  grades 
of  stock  and  then  subdivide  the  cards  for  each 
grade  by  size  or  weight  until  you  have  from 
six  to  a  dozen  cards  in  each  division. 

Keeping  Track  of  Cuts  and  Electrotypes: 

The  bins,  shelves  and  cabinets  in  which  they 
are  stored  should  be  numbered  somewhat  as 
described  for  the  stock.  When  cuts  are  put 
away,  a  proof  should  be  taken  of  them,  marked 


■m 


^A^^^^Md^M^t^iibate 


0J 


76  A  n    A  c  c  o  un  ti  n  g    System 


with  the  place  they  are  to  be  found,  as  Cabinet 
6,  Drawer  10.  If  these  proofs  are  taken  on 
sheets  83^  x  11,  or  sheets  which  will  fold  to 
that  size,  they  can  be  filed  in  tagboard  folders, 
such  as  are  used  in  vertical  letter  files,  keeping 
proofs  of  each  customer's  cuts  in  their  folder, 
or  subdividing  them  as  found  convenient. 


UNIVERSITY  OF  CALIFORNIA  LIBRARY 
BERKELEY 

Return  to  desk  from  which  borrowed. 
This  book  is  DUE  on  the  last  date  stamped  below. 

2tlVov'55PlV 

•^'^*^.38, 

N0V2  1 1955  m 

20Feb'62JW 

REC'D  LD 

. 

FEB  6    1962 

■ 

"^'Mim 

j 

m 

LD  21-100m-ll,'49(B714e 

1 

;sl6)476 

<u 


^ 


^C  24777 


Jr 


4.4S56H 


